U-Haul Economics

One popular way to compare the relative economic conditions between pairs of U.S. cities in the continental U.S. at any given time is to see which direction a one way U-Haul truck rental is more expensive. U-Haul rates are highly demand sensitive so the more imbalanced one way traffic is between a pair of cities, the more the rates diverge. Presumably when more people are moving from A to B, than from B to A, B has a stronger economy than A, and it costs more to rent a truck from A to B than from B to A.

I plugged a few simple scenarios in the the U-Haul website looking for quotes to/from Denver and the following three cities for a 10' truck on departing on October 30 2009: Chicago, New York and San Francisco. The results were interesting and painted a relatively favorable picture of the Denver economy.

Den to Chi: $413
Chi to Den: $1438

Den to NYC: $1333
NYC to Den: $1582

Den to SF: $744
SF to Den: $1009

Obviously this is hardly a full sample across truck sizes, days of the week, seasons, or broader time periods but it does indicate that Denver appears to be doing relatively well economically particularly compared to the Windy City.

Sunny Day in the Renewable Range

A real nice piece of economic development news broke this morning in the Renewable Range.

The German company SMA Solar Technology AG, announced it will be opening a Denver manufacturing facility near Stapleton which is expected to employ 300 full time workers and hundreds more seasonally once it is fully staffed. SMA makes solar inverters--with a product lineup of Sunny Boy, Sunny Central and Sunny Island --that convert direct current generated by photovoltaic solar panels into the alternating current employed by the electric grid.

See here for SMA's press release announcing the decision.

Generating 300 manufacturing jobs within Denver city limits is a big deal, especially given the state of the U.S. economy and this announcement strengthens Colorado's claim to be an emerging green energy cluster. Each new green energy sector job win increases the probability of future wins due to the network effects of agglomeration.

The Post cites SMA's Chief Financial Officer about the reasons the company selected Metro Denver for the facility's location.

"[t]he [Denver] region's educated workforce; the site's proximity to
Interstate 70, rail and Denver International Airport; lower operating costs; and
the area's focus on renewable-energy research were behind the decision to locate
here."

According to The Post, the State of Colorado and City of Denver provided $3.6 million in economic development incentives to SMA.

In Germany, SMA is located north of Frankfurt along a high speed rail line. I am not too familiar with Germany, but I suspect the direct flights between Frankfurt and DIA really facilitated this decision.

DaVita Looking in CBD for HQ

After my recent post bemoaning the dearth of major companies with HQs in downtown Denver's CBD, it is exciting that DaVita is looking in LoDo for its new HQ location.

John Rebchook's Inside Real Estate News

This spring I blogged about the end of The Rocky. Recently, I have been really enjoying reading Inside Real Estate News, a blog by former Rocky business writer John Rebchook. Rebchook puts out a prodigious amount of valuable information and data about current events, economic and real estate trends and other subjects very relevant to economic development issues. It is great that John is still engaged in reporting the economic and real estate happenings in the Denver region and is sharing his knowledge, creativity and insights with us.

Denver Not Bidding for 2018 Winter Olympics

Neither Denver or any other U.S. city is going to be bidding for the 2018 Winter Olympics according to the Wall Street Journal.