November 2006
Metro Denver venture capital surges in third quarter
Metro Denver’s venture capital awards surged and office space vacancy rates declined, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for November 2006.
Colorado ranked 15th in the nation for the percentage increase in jobs added during the second quarter of the year according to a report by the Federal Deposit Insurance Corp. According to the report, Colorado reported a 2.2% gain compared to a 1.4% gain at the national level. Further, venture capital awards to Colorado companies surged in the third quarter of the year to the biggest three-month total since 2002. The Ernst & Young and Dow Jones Venture One study reported a total of $195 million in funding among 17 deals during the third quarter, up from $64.4 million in the second quarter.
“The influx of venture capital is testimony to our vibrant business environment,” said Tom Clark, executive vice president of the Metro Denver EDC. “We have the highly-educated workforce that sustains the type of innovative companies for which venture capital is vital to their success.”
For the year, Colorado companies have attracted $368.2 million among 45 deals. Centennial-based Adam Aircraft Industries received the third largest venture capital award in the nation during the third quarter of $93 million to develop the A500 jet which was recently approved by the Federal Aviation Administration. A Connecticut-based company has also made an initial commitment to purchase 101 of Adam Aircraft Industries A700 lightweight jets.
Other business growth includes the seventh corporate buyout by Broomfield-based Level-3 Communications with its $1.47 billion purchase of rival fiber-optic network provider Broadwing Corp. based in Austin, TX.
Additionally, FedEx selected Commerce City for its second largest freight distribution center, behind only Dallas’ facility. Metro Denver’s central location for east-west shipments was key in the site selection process. The Memphis-based company broke ground on the 170,000-square-foot facility in mid-October which is scheduled for completion in November 2007.
In additional office market news, Grubb & Ellis describes Metro Denver’s office market as strong, driven by decreasing vacancy rates and increasing lease rates. The Office Market Trends Denver report for the third quarter pegs the overall metro vacancy rate at 15%, including an 11.9% vacancy rate in the CBD and 16.1% in the suburban markets.
The Monthly Economic Summary provides a snapshot of metro area economic activity, as well as its relationship to national and regional economic trends.