by Michelle Z. Askeland
In the past five years, prices for
the land surrounding light-rail sta-
tions have doubled and, in some
areas, tripled on a cost per-square-
foot basis. One example is the
Village Center Station near the
Arapahoe light-rail station. About
four years ago, the land was valued
around $21 a square foot, and now
it’s $60 a sf, said Tim Harrington,
executive managing director of
Newmark Grubb Knight Frank. At
the other end of the line, property
downtown within proximity of light
rail has skyrocketed. It now ranges
from $300 to $600 a sf.
“The trend is transit,” said Har-
rington. “That’s where all these
companies want to be. They want to
be within close proximity to transit
for the purpose of their employees.”
In the past, company executives
decided an office’s location and the
employees would follow, said Tom
Lee, executive managing director of
Newmark Grubb Knight Frank. This
often meant the location was con-
venient to the executive’s residence.
Today, that’s reversed. Companies
need to go where employees want
to be, and employees want to be
urban and they want to be at tran-
sit, he said.
Not only is it important to tenants
and employees, it affects investors
as well. “It’s becoming more and
more important to investors to be by
light rail,” said Geoff Baukol, execu-
tive vice president with the CBRE
capital markets division. About five
years ago, one client told Baukol
that rather than looking at the mar-
ket in two ways – central business
district assets and suburban office
assets – they had started looking
at the market in three ways – CBD,
suburban and transit-oriented. This
thought process has only escalated
since then, he said.
Developers and investors are plac-
ing their bets downtown on assets
within proximity to Union Station.
The two highest-priced office build-
ings that have sold in metro Denver
are still the two office buildings
adjacent to Union Station. “You can-
not recreate those two buildings
again, and they are at Main and
Main for transit,” said Lee.
Other successful downtown tran-
sit-oriented office projects include
1551 Wewatta, 1900 Sixteenth, the
Triangle Building and Dairy Block.
All are fully leased or well on their
Courtesy NGKF
Across Denver, land values near light-rail stops are increasing at record pace as tenants and investors seek out property to satisfy the growing demand to be near transit.
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