CREJ - Office Properties Quarterly

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April 2015 — Office Properties Quarterly — Page 13
D enver’s growth is chang-
ing the city’s culture and
energy – a change rivaling
the great cities of the world.
Within the next few years,
downtown will continue attracting
people of all ages and companies of
all sizes, boosting demand for office
space. Recently, many companies
decided to relocate or open offices
in Denver to access the educated
workforce offered in the Mile High
City. The central business district is
only 11.2 percent vacant, and Lower
Downtown and the Central Platte
Valley market are even lower at 6
percent direct vacancy. Downtown
is tracking 831,005 square feet of
new office construction underway
with the majority coming in large,
traditional office blocks.
Technology, advertising, media
and information companies account
for a large portion of Denver’s office
market. Where are these companies
choosing to office and what is driv-
ing their decision?
It is no secret that LoDo provides
TAMI companies with the best of all
worlds. LoDo’s proximity to down-
town provides great access to public
transportation, commerce, enter-
tainment and density of workers.
However, if you are looking to move
a business here, these amenities
will cost you. The high demand for
creative office space coupled with
the redevelopment of Union Station
drove the vacancy in the area to an
all-time low, while rents continue to
sky rocket. Does this mean there is
no hope for a cre-
ative company that
does not want to
break the budget?
The answer is no.
Areas such as River
North and South
Broadway, made up
of predominately
infill redevelop-
ment properties,
offer perceived
value while stay-
ing connected to
the amenities and
culture that TAMI companies cher-
ish. Neighborhoods like Ballpark,
Five Points, Curtis Park, Highlands,
Lower Highlands, Golden Triangle,
Santa Fe Arts District and the Baker
Neighborhood are experiencing tre-
mendous growth.
Working with these creative com-
panies every day, our tenant rep-
resentation team has seen a shift
in the type of space companies
want to occupy. Companies are now
searching for more diverse office
space, ranging from quiet, individ-
ual work environments to large ad-
hoc collaborative meeting spaces.
Creative space is the intersection of
innovation and collaboration, and
converted warehouses and reno-
vated office buildings support these
types of build-outs.
For instance, the RiNo area has
creative office concepts popping up
all over the place, turning historical-
ly industrial areas into a burgeon-
ing tech environment. Restaurants,
breweries and
bars are anchor-
ing neighborhoods
and providing local
flavors that draw
a healthy mix of
people.
Stepping into the
Periphery
In competitive
business environ-
ments, companies
need to attract and
maintain a high-quality workforce.
Today’s workers, especially the
millennials, demand more than a
desk, computer and phone, which
drives management to look beyond
the status quo to find inspirational
spaces with character. Employees
want access to amenities that help
them create a healthy work-life
balance. These amenities include
bars, restaurants, yoga studios and
proximity to quality housing. Com-
panies are expanding outside tradi-
tional markets that offer lower-cost,
cutting-edge spaces.
Several companies that have bet
on these locations include Mersive
(RiNo) and Sprocket Design (Golden
Triangle). According to both com-
panies, walkability, lifestyle and
access to transportation are key ele-
ments to providing their employees
with a healthier work-life balance.
Sprocket Design Build Principal Bill
Moore said he believes buildings
in these areas are blurring lines
between traditional classifications
of office buildings.
Companies like Mersive, which
has a large number of employees
who bike to work or ride public
transportation, love areas like RiNo
because of the proximity to bike
paths, bus lines and the highway.
When Sprocket Design Build
needed space, it was looking for
value in a cutting-edge space.
Moore said he wanted to be near
the Golden Triangle and purchased
a former nightclub building at
Ninth and Lincoln. After modest
renovations, the building is a prime
example of adaptive reuse.
While these buildings offer char-
acter, culture and charm, they are
not without drawbacks. Some of
these older buildings still have
problems, but as long as you can
make an informed decision and
know how to navigate the realm
of a creative office, these types of
spaces can offer immense value to
companies.
If approached correctly, compa-
nies willing to look outside tradi-
tional markets can access the less-
er-known market of inspirational,
creative space in a price range that
will not break the bank. While these
spaces are not for everyone, they
provide ample access to amenities
desired by today’s workforce and
can provide an added advantage
when competing for top talent. s
Hadley Cox
Vice president,
CBRE | Brokerage
Services, Denver
Drew Thomas
CBRE | Brokerage
Services, Denver
Leasing Outlook