The scenic Mountain Region — comprised of the states of Colorado, Idaho, Montana and Wyoming — did not escape the ravages of the COVID-19 outbreak but have generally done better than other regions of the country over the past several months. All four states in the region, however, saw significant gross domestic product declines in first-quarter 2020.
Just like the rest of the U.S., unemployment rates shot up dramatically in the Mountain Region but, relatively speaking, the jobless rates in these states have been on the lower end of the spectrum. As of this past June, regional unemployment rates ranged from 5.6% in Idaho to 10.5% in Colorado, below the national average of 11.1%. Wages are lower in portions of this region. Idaho and Montana were ranked 43rd and 34th, respectively, in per capita income as of 2019. Wyoming and Colorado, however, ranked No. 9 and No. 11, respectively.
Known for such natural wonders as Yellowstone National Park and the Rocky Mountain range, this region is notable for a lack of big cities. The Denver metro area with its 3 million residents is the exception. Wyoming is the least-populous state in the country with less than 600,000 people. Its largest city, Cheyenne, has only 65,000 inhabitants.
Many communities in the Mountain Region, however, have seen huge population growth. The population of Boise, Idaho has more than doubled since 1980 to about 235,000, with a current metro-area population of about 771,000. Another fast-growing city in this region is Colorado Springs, Colorado, with a population of nearly 500,000. Others notable population centers include Fort Collins and Boulder, Colorado; Billings and Missoula, Montana; and Casper and Laramie, Wyoming.
The economies of these states are diverse, although each of them has a strong agriculture base in common. Colorado is a magnet for businesses. Centennial-based global electronics distributor Arrow Electronics, Denver-based health provider DaVita and Englewood-based broadcasting giant Dish Network are among the state’s largest companies.
Idaho is the nation’s No. 1 producer of potatoes, but it also is home to the computer chip manufacturer Micron Technology. Home prices in Boise rose faster than any other city in the nation last year.
Montana’s largest companies include the Billings-based utilities company Talen Montana and insurance agency Fringe Benefit Resources, based in Great Falls. Meanwhile, Wyoming is a leader in the mining of gold and other precious metals, as well as oil and natural gas exploration. Its largest employers include the Cheyenne-based defense contractor Omega Probe and Elkhorn Construction, which primarily serves the state’s oil, gas and mining industries.
Denver Office Market
The Denver office market was experiencing turbulence after the outbreak of COVID-19. In second-quarter 2020, overall vacancies rose for the first time in five quarters, up 70 basis points to 14.7%, Cushman & Wakefield reported. Overall rents, however, remained steady and increased slightly compared to the previous quarter to $29.09 per square foot.
Overall leasing activity slowed dramatically as the full impact of the pandemic took hold across the metro area. Net absorption plummeted from roughly 597,000 square feet in the first quarter of the year to a negative total of about 733,000 square feet in the second quarter, according to Cushman & Wakefield. Denver’s central business district was the hardest hit of all submarkets due to a concentration of struggling oil and gas tenants. Additionally, there were no newly constructed office projects delivered across the metro area in second-quarter 2020, the company reported.
Agriculture has always been a big business in the Mountain Region. Idaho is the nation’s No. 1 producer of potatoes, growing 14 billion pounds per year. The Gem State also is a leading producer of barley, hay, peppermint and trout. Farming is one of the top three industries in Wyoming with cash receipts of nearly $2 billion annually. The average size of farms and ranches in the Cowboy State is the largest among all states, according to the U.S. Department of Agriculture (USDA).
There are nearly 34,000 farms and ranches in Colorado encompassing 31.7 million acres. Colorado has than 170,000 jobs and about $40 billion in annual economic output tied to the industry. In Montana, there are an estimated 26,800 farms and roughly 1.4 million beef cows, the USDA reported.
What the locals say
“A lot of people who don’t like the traffic, taxes or regulation in their states turn around and look at the Mountain West as a solution, where we have a high-quality-of-life, low-cost-of-living option for them. We’re seeing a lot of people say, ‘Heck yeah, off to Idaho, off to Montana, off to Colorado.’ [In terms of the commercial real estate market in Boise], the biggest problem is a lack of inventory. If I were a [real estate] broker, that is what I’m spending most of my time doing — trying to generate inventory for sale. Most of the listings never actually make it to the market and they’re all sold in-house.”
Managing partner, Pontifex Capital
3 Cities to Watch
The Mile High City is the 19th-most populous metro area in the U.S. and has about 734,000 residents in the city proper. In recent years, the Denver metro area has attracted several high-tech companies, such as Arrow Electronics and HomeAdvisor, as well as satellite offices for Facebook, Google and Lyft, among others. In October 2019, however, the beer company Molson Coors announced it was moving its North American headquarters from Denver to Chicago.
The capital city of Idaho is known as the “City of Trees” because of the thousands of shade trees that were planted after its founding in 1863. The city is home base to several large companies, including supermarket chain Albertson’s, wood and paper products company Boise Cascade, and frozen foods and cattle company J.R. Simplot Co. According to Zillow, the median home price in the city rose by 10.3% year over year this past March to $341,449.
Named after Frederick Billings, the president of the Northern Pacific Railroad, the most-populous city in Montana (110,000 residents) is a regional hub and the county seat of Yellowstone County. The Western Sugar Cooperative plan processes a multimillion-dollar crop of sugar beets each year while the oil refineries in this section of the state made Billings the oil-refining capital of the Northern Rockies.
Sources: Billings Chamber of Commerce; Colorado Department of Agriculture; Cushman & Wakefield; Denver Business Journal; Forbes; Idaho State Department of Agriculture; Idaho Statesman; KTVB.com; Statista; The Denver Post; Trading Economics; U.S. Bureau of Economic Analysis; U.S. Bureau of Labor Statistics; U.S. Census Bureau; U.S. Department of Agriculture; U.S. Department of Labor; WorldAtlas.com; World Population Review; Zillow