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DENVER-It has been a solid year, but far from a record-breaking one for commercial real estate sales in the Denver metro area.

Investors have snapped up $1.2 billion for 163 commercial properties in 2000, shows a report by Brad Neiman, senior managing director of Denver-based Mile High Properties LLC. It’s the fourth consecutive year that sales of office buildings, retail stores and industrial properties have topped $1 billion.

But this year’s dollar volume has dropped 22% from the $1.57 billion sold last year and the number of transactions have declined 19% from the 201 sales in 1999, according to Neiman. He has been tracking commercial investment sales of more than $1 million for more than 15 years.

Sales activity had peaked in 1998, when REITs went on a buying spree, driving up sales to a record $2.36 billion. Today, sales are more than double than they were in 1995, when they stood at $569 million. Since 1990, investors have paid slightly more than $10.5 billion for commercial real estate. Of that, almost $6.5 billion has been paid since 1997.

The largest single sale this year has been JP Morgan’s $135.5-million purchase of the 660,000-sf 17th Street Plaza office tower in the CBD. The second largest sale has been Carlyle’s $84.8 million-acquisition of the U.S. Bank Plaza’s 591,000-sf office tower, also in downtown.

Looking at the sales chart during the past decade is a good measure of Denver’s economy since it shows cycles, Neiman told GlobeSt.com. “We started coming out of our recession in the early 1990s. In 1997, we saw the emergence of the REITs, which essentially lasted two years. We saw their very aggressive demand to buy properties push prices up. Then it came to an abrupt halt,” he says. “It went backward in 1999 and 2000.”

He says investors will continue to be cautious in 2001, paying special attention to the credit worthiness of tenants. “If there’s a recession, it will take everything up a notch,” Neiman says. “Conservative investors will be even more conservative. The real estate market is not going to operate one step differently than the rest of the economy, if there’s a recession.” He acknowledges the predictions of a recession, but like others he doesn’t believe it will strike in 2001.

Colorado will see the creation of thousands of jobs from the multi-billion-dollar widening of Interstate 25. The project kicks off next year and will last for eight. “That will keep the multifamily area extremely busy,” Neiman says.

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