Page 16
— Office Properties Quarterly — March 2016
Market Drivers
way, said Harrington.
Moving into the suburban south-
east, recent TOD projects include
the Denver Design District near the
Alameda station, the repurposed
990 S. Broadway building at the
Broadway station, the mixed-used
Colorado Center plans for the Colo-
rado station, One Belleview Station
at the Belleview station, Triad at the
Orchard station, CoBank and the
third Village Center Station project
at the Arapahoe station, Panorama
Corporate Center at the Dry Creek
station and others.
Migrating off the SES corridor,
another active office area is the
River North neighborhood. The
submarket has a large footprint,
but the light-rail station at 38th
and Blake is going to be the center
point, which will be anchored by
the World Trade Center campus.
With a large international draw, the
trade center project wanted a tran-
sit-oriented location in order to take
advantage of the new train to Den-
ver International Airport, said Lee.
“If you look at land values in RiNo,
you’ve seen ground appreciation
that’s off the charts over the last five
years – maybe the fastest-appreciat-
ing land in the entire metro area,” Lee
said.
Another area playing its light-rail
proximity well is Stapleton’s Central
Park station, which will open in late
April. The city held off marketing the
real estate until the station was with-
in sight of opening in order to make
the land as valuable as possible. A 6
million-sf master plan calls for densi-
ties of office, residential, multifamily,
retail and hotel, said Harrington.
Land values went from $14 to $15
a sf up to $45 a sf over a three-year
time frame, he said. “You’ve really
seen substantial appreciation of
value on a square foot basis,” he said.
“That’s the price today, but as more
development occurs, those prices
could easily go up to $60 to $90 a
square foot.”
Stapleton residents who work
downtown report the highest drive-
alone numbers of all commuters
coming into downtown Denver,
according to the Downtown Denver
Partnership. The partnership, which
tracks commuter behavior for down-
town employees, is eager to see how
commuting habits for Stapleton resi-
dents will change once the station
opens, said Aylene McCallum, direc-
tor of downtown environment with
the Downtown Denver Partnership.
Demand
With office demand surging
across the metro area, most new
Class A product will move fast,
regardless of its location. But when
considering the light-rail bump, it’s
interesting to look at older product
situated along the lines as well.
Late in 2015, Baukol was involved
in the sale of CoBank and Triad,
both located along the SES lines.
“CoBank is a Class A core brand-
new building,” he said. “I’m going
to get attention on that whether
it’s on light rail or not, but light rail
Courtesy NGKF
To encourage walking from office buildings to the light rail in suburban sites, it is important that the paths are clear, safe and well marked.
Industry experts share predic-
tions for the market impacts as
light rail expands.
• The more frequent and reliable
service becomes, the more com-
petitive light rail and public transit
becomes to commuters.
• Land scarcity along the subur-
ban southeast lines will continue
to increase.
• Hot spots include River North,
Stapleton and land near stations
along the Denver International
Airport route.
• More corporations, following
Prologis and Liberty Global, will
locate/relocate at transit.
• The west lines will remain
largely residential for now.
• Cherry Creek will continue to
have active office development
and exponential rent growth,
despite no proximity to light rail.
• Investors will continue to con-
sider nontransit-oriented office
assets in addition to transit-orient-
ed assets throughout the area.
• There will be more innovation
on behalf of office developers and
owners to help tenants bridge the
“last mile” between light-rail sta-
tions and office properties that are
close but not within the walkable
bubble.
Predictions for the coming years
