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— Office Properties Quarterly — January 2015

I

believe downtown’s thriving

economy over the past few years

has impacted top-tier law firms,

who are committed to recruiting

and retaining the best-in-class

professionals in the region.

Home to more than 17,500 resi-

dents, downtown Denver has flour-

ished over the past decade, witness-

ing a 142 percent residential spike

since 2000. This drastic residential

growth naturally resulted in a preva-

lent boom in business.

Between late 2009 and mid-2013,

office vacancy in downtown Denver

fell sharply from a high of 18.3 per-

cent to 13.8 percent. With employ-

ment levels rising 4.5 percent and 1.4

percent in the first quarters of 2013

and 2014, respectively, office vacan-

cies fell by an additional 1.2 percent-

age points between the third quarters

of 2013 and 2014.

With more than 27 million square

feet of office space and an additional

2,526,000 sf of office space cur-

rently planned or under construction,

downtown Denver has the capacity to

handle this spike in business and is

attracting the young talent needed to

sustain such growth.

As working professionals drive

31 percent of downtown Denver’s

economy, I’d like to take a closer look

at the movement and activity in the

commercial real estate sector – par-

ticularly the traction and success I’ve

noticed involving law firms.

Only a couple of years ago, many

law firms would be reluctant to sign

long-term leases or expand in more

locations. Now law-firm transactions

downtown, includ-

ing seven deals

we’ve closed over

the past year and

a half, all suggest

that law firms are

an imperative com-

ponent to the com-

mercial real estate

landscape.

Recently ranked

by Forbes as No. 4

best place for busi-

ness and careers,

the city’s high qual-

ity of life, relatively

affordable living costs and favor-

able environment for job seekers is a

major draw for millennials between

the ages of 20 and 34. This increase

in a younger, talented workforce

drives competition up among law

firms, encouraging them to consider

newer spaces that are convenient to

public transportation and offer better

amenities to attract the talent. Firms

are taking advantage of various con-

cessions and amenities along with

the significant abatement paired with

long-term leases in newer develop-

ments or redevelopment projects.

Two major downtown construction

projects help reinforce the growth of

the market and suggest why top-tier

firms are finding opportunities to

maximize on the thriving economy.

The law-firm leasing activity at

1401 Lawrence St. and 1801 Califor-

nia St. further substantiate the notion

that law firms will continue to serve

as important anchor tenants, even in

new developments.

The development at 1401 Lawrence

St. is a 290,000-sf, 21-story office

tower with ground-floor retail and

347 parking spaces. Polsinelli signed

a long-term lease for 86,664 sf of

space at the property, becoming the

first significant tenant to commit

to the development. Polsinelli will

move from 1515 Wynkoop St. and

will gain parapet Interstate 25-facing

signage at the new location, which is

extremely important to the firm. This

trend of brand recognition impor-

tance is an indication that recruit-

ment and retention are becoming

integral components in firms’ busi-

ness strategies in the upswing of the

city’s economy.

1801 California St., the former

Qwest Tower, is undergoing a state-

of-the-art redevelopment. It has

successfully recruited big name law

firm tenants, such as BakerHostetler,

Butler Snow, Fairfield and Woods PC,

and Merchant & Gould PC. Combined,

these firms have leased 118,065 sf

over the past 18 months.

The Wells Fargo building, how-

ever, was able to retain clients with

enhanced concessions and abate-

ment packages in order to stay rel-

evant in the market. Faegre Baker

Daniels LLP, Spencer Fane & Grim-

shaw LLP, and Fennemore Craig

renewed last year for 96,000 sf on

floors 31-34; 23,678 sf on the 20th

floor; and 18,000 sf on the 24th floor

of the property, respectively.

Additional law-firm activity in

Lower Downtown includes the recent

renewal and restructuring for Ritse-

ma & Lyon PC for 22,181 sf of space

at 999 18th St. The firm was offered

an attractive concessionary package

by the landlord in order to compete

with nearby buildings. A new lease

also was signed for MiletichCohen PC

for 5,415 sf at 1660 Wynkoop St.

These examples signify the

strength and growth of Denver’s

market and confirm the need for

outstanding concessions and rapidly

improving packages for tenants as

regional and local law firms continue

to compete for top talent and dynam-

ic workplace environments.

s

Top-tier law firms commit to downtown Denver

Central Business District

Robert Link

Executive vice

president and

branch manager,

Savills Studley,

Denver

At North Forest Office Space, we make leasing easy.

We offer affordable lease rates and guaranteed pricing with no hidden costs and upscale amenities.

Your clients can lease what they need today, and then add space as they grow.

Professional, medical and dental space in Brighton, Commerce City, Westminster, Firestone & Thornton • (303) 862-6367

• northforest.com

DENVER • BUFFALO • ROCHESTER • AUSTIN

Offer your clients

office space

that grows

with them.

With more than 27

million square feet of

office space and an

additional 2,526,000

sf of office space

currently planned or

under construction,

downtown Denver has

the capacity to handle

this spike in business

and is attracting the

young talent needed to

sustain such growth.