CREJ - Journal

12 / 92

Page 12 — COLORADO REAL ESTATE JOURNAL — May 6-May 19, 2015
by Jill Jamieson-Nichols
Technology is the secondmost
active industry in office leasing
in the Denver region, with Boul-
der and Fort Collins-Loveland
among the top 10 metro areas
for high-tech startups, accord-
ing to a recent report by CBRE.
The Denver-Boulder mar-
ket recorded more than 3 mil-
lion square feet of technology
leasing activity since 2011, or
13 percent of the total activ-
ity by square footage, CBRE
said in its report, Colorado Tech
Book: Changing Landscape
of Tech Real Estate in Colo-
rado. Transactions greater than
100,000 sf included Aircell, Tru-
ven, Healthcare Analytics and
TriZetto Group.
Venture capital has increased
significantly, with $488.5 mil-
lion invested in Colorado tech
companies last year.
Research of leases 10,000 sf
or greater showed the aver-
age tech lease transaction over
the last four years, including
expansions and renewals, was
37,300 sf. However, the average
deal size may be smaller given
the entrepreneurial and startup
nature of the industry, which
frequently sees deals of 500 to
5,000 sf, particularly for com-
panies located in co-working
or creative office space. Leases
in the most active industry –
financial services – averaged
37,800 sf.
Tech companies with the larg-
est Front Range footprints are
Oracle, HP and Agilent, each
of which occupies more than
600,000 sf.
Boulder traditionally has cap-
tured the full spectrum of the
tech industry, from startups to
mature and legacy companies
like Rally Software and IBM.
Communities along the U.S.
Highway 36 corridor have ben-
efitted from Boulder’s position,
attracting tech businesses that
require larger footprints.
Yet tech companies are
increasingly drawn to down-
town Denver because of an
overall shift to urban environ-
ments coupled with new ame-
nities and redevelopment, nota-
bly Denver Union Station, that
have re-energized downtown.
In fact downtown, with compa-
nies including Zayo Group and
SendGrid, along with periph-
ery markets like River North,
the Golden Triangle and South
Broadway, shows some of the
strongest potential for technol-
ogy growth, CBRE tech experts
said in a Twitter chat following
the report’s release.
A major tech occupier would
solidify Denver’s position as
a dense tech hub, CBRE said
during the chat, which gener-
ated 8,564 impressions. “There
is interest in downtown from
major occupiers outside of the
Denver market. 2015 will be a
big year … Boulder will also see
big expansions in 2015.”
The technology footprint
varies along the Front Range.
Colorado Springs’ technology
industry is characterized less
by startups and more by large
entities involved in aerospace
and defense, as well as high-
tech manufacturing. Fort Col-
lins, with its ties to Colorado
State University, cultivates tech
startups in the software, bio-
technology and energy sectors.
Tech companies are drawn
to the state’s highly educated
workforce and relatively afford-
able real estate costs, accord-
ing to CBRE. Denver had the
13th highest office lease rate of
CBRE’s Tech Twenty markets
in the fourth quarter of 2014.
Rates averaged $23.15 per sf full
service gross, while San Fran-
cisco averaged $63.24 per sf. “In
comparison to coastal markets,
we remain affordable. However
rising housing costs are a chal-
lenge to address,” CBRE said.
High-tech employment
growth outpaced the Den-
ver-Boulder market’s robust
employment growth from 2011
to 2013, producing nearly 13,000
new jobs, or 7.8 percent of the
total jobs added. Growth has
been strongest in the Denver-
Boulder region, with Colorado
Springs and Fort Collins yet to
return to or surpass 2003 levels.
More than three-quarters of
Front Range tech jobs are in the
Denver-Boulder area. Colorado
Springs had the highest tech-
nology job concentration, 5.3
percent, as of the second quar-
ter of 2014, compared with 4.8
percent in Denver-Boulder and
4.7 percent in Fort Collins.
Although the number of tech-
nology jobs dropped during the
recession, as did other sectors
of the economy, they rebound-
ed more quickly and strongly,
according to CBRE.
Jessica Ostermick, director of
research and analysis for CBRE,
and research analyst Garrik
Gibbings-Issac authored the
report. s
Greater Denver
CBRE