This newsletter is a compilation of news and information regarding the rental markets in Boulder and Broomfield counties and the economic status of and outlook for the area. It is issued during the first week of the month. The sources for the data include local and regional news media, association publications and seminars, and information gathered from contacts in the property management and real estate fields. We make every effort to cite all of our sources. Should we miss one please let us know so that we can correct the omission.

Company News

Check out our website at www.persmgt.com. This is the tool we use to market the properties we have for rent and describe the services we offer. We continue to improve it to better serve our clients.

The National Economy

The U. S. Labor Department announced that the job market grew at a healthy pace for two months in March and April of this year, with increases in manufacturing and nearly every major industry. (The Denver Post, May 8, 2004).

The Federal Reserve Board continued to hold its key interest rate at a 46-year low, but continues to indicate that they will consider raising rates in order to stave off inflation. (The Denver Post, May 5, 2004). Consquently, interest rate concerns pushed the Dow Jones industrial average below 10,000 for the first time since last December, while the other three major indices dropped to their lowest levels for the year. (The Denver Post, May 11, 2004). Later in the month, the markets dropped upon further bad news in Iraq: the assassination of the governing council. (The Denver Post, May 18, 2004). At month's end, the markets rose, fueled by a positive report on consumer confidence. (The Denver Post, May 26, 2004).

Colorado Economy

The Denver Metro area appears to be inching upward in terms of increases in stock and manufacturing activity, as well as a drop in unemployment. Employment increases are in the natural resources, financial services, education, and health services areas. (The Denver Post, May 15, 2004). Colorado added 14,500 new jobs in April--the second fastest growth rate in the nation. The growth was in seven of the state's 11 major industries. (The Denver Post, May 22, 2004).

Regional Stock Performance: Largest Percentage Gainers over last Two Weeks

• Pharmion +75%
• SpectraLink Corp. +14%
• Level 3 Communications +12%
• New Frontier Media +11%
• Dynamic Materials +8%
• Zions Bancorp +7%
• Keycorp +6%
• Ball Aerospace +6%

Office Vacancy Rate Continues to Disappoint

After signs of improvement last year, the office vacancy rate in Boulder and Broomfield counties increased in the first quarter of this year. The rates in those two counties increased from 23.3% to 25.1%. An average rate below 10% is considered a healthy market by real estate brokers.

Some of our local vacancy rates are....

Residential rental market

The local rental market continues to be a renter's market. The chart here shows there are approximately 1,106 advertised rentals in the Daily Camera this week. This compares to 467 and 1,498 advertised rentals at this same period in 2002 and 2003 respectively. Hopefully, this indicates we hit the rental market low point last year and this year, although still not normal, is showing signs of improvement.

These number are also supported by the increase in the total number of calls we are receiving for available rentals. Showings are already picking up even though these prospective tenants are still shopping heavily. Rent continues to be the deciding factor. A close second is air conditioning as we are already setting heat records here in the area.

According to our sources in the property management industry everyone is seeing these same trends. There is a great deal of optimism for the peak season (July & August) this year. Some of the analysts are giving tentative predictions that summer 2005 will be much closer to normal as the local economy improves. We will keep you aprised of the trends each month.

City of Boulder rental news

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