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— Office Properties Quarterly — June 2016
rate for available office space of all
classes was $19.50 per sf per year at
the end of first-quarter 2016 in the
Northern Colorado market.
There are several tenants moving
into large blocks of space. Madwire
Web Design moved into 66,667 sf in
a portion of the Fort Collins Hewlett-
Packard campus. In the fourth-
quarter 2015, cable and Internet giant
Comcast Corp. leased approximately
62,229 sf in the HP campus and
intends to provide 600 new call center
jobs to the trade area. The new center
is an addition to existing customer
service sites in the southern Denver
metro area, where Comcast employs
400 people.
Another tenant active in the market
was Pinnacle Agricultural Holdings
LLC, which leased approximately
24,010 sf at 4850 Hahns Peak Drive in
Loveland.
On the investment side of things,
a portfolio sale of two properties
located at 1250 H St. and 224 Dundee
Ave. in Greeley sold for a total of $10.4
million. This comprised approxi-
mately 122,944 sf of Class B office and
flex space. In March, a local investor
in Imago Enterprise LLC purchased a
three-story office building located at
1730 S. College Ave. in midtown Fort
Collins for $2.4 million with the plan
of exterior renovation that is current-
ly in progress.
With that being said, the office
market is constricted with the lack of
quality investment product. Cap rates
have been compressed to low levels,
and we believe that will remain a
trend until interest rates adversely
affect them. We’ve seen a slight
uptick in interest rates; however, we
are seeing great financing incentives
from the banks and institutional
lenders for longer-term, fixed interest
rates and/or non- or partial recourse.
Now is as good a time as any to lock
down your financing.
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translate to huge economic differ-
ences for clients.
Why Build?
In this competitive
landscape, clients may contemplate
whether new construction makes
sense. As development rapidly con-
tinues in Denver and the costs for
new construction increase, the value
of existing real estate is buoyed by
the overall value of existing supply.
While the cost per square foot
may be higher for new space, today’s
design, generally, is more efficient
and tenants may require less sf for
a more customized, modern prod-
uct. With a 15 percent reduction
in sf enabled by new construction,
the economic gap can be bridged to
receive a modern office space.
Even in this window of higher
costs to deliver new office space,
clients find it strategically benefi-
cial for their organizations. Tailored
workspaces in a new building can
enable corporate growth and benefit
companies by increasing productiv-
ity, collaboration and retention of
employees.
Now, more than ever, it is impor-
tant to proactively ensure that clients
are aware of this environment and
guide them to invest in the areas
that maximize the most benefit and
value for their companies. By thor-
oughly understanding clients’ needs,
developers can prioritize spending
to enable mindful growth and opera-
tional excellence for their clients.
s
than tradition.
CBRE is a leading provider of work-
place strategy services through the
workplace strategy team, led by
Lenny Beaudoin and Georgia Col-
lins. One of the main reasons for this
expertise is because we have used
our own company and talent as a liv-
ing laboratory. Through an in-depth
analysis of how people work, we
created a workplace strategy initia-
tive called Workplace360, which is
designed to provide:
• The optimal mix of private and
collaborative space.
• A wide variety of space types to
fit different work styles.
• The technology required to enable
collaboration and enhance productiv-
ity.
• Spaces that foster community,
engagement with the brand and pride.
Workplace360 is implemented
in more than 30 of the company’s
offices worldwide, under the stra-
tegic leadership of the workplace
strategy team, most recently here in
Denver.
At the time this article was writ-
ten, we have been in our new envi-
ronment for just over one month,
and the impact on the people in the
Denver office is profound. We are
working together more effectively
than in the past, leveraging each
other’s knowledge and expertise to
create opportunity.
By leveraging lessons learned,
companies can find and create their
own unique work environments. In
doing so, companies can transform
their real estate from an ineffective
asset to a powerful tool to attract
and retain top talent and achieve
a competitive advantage for their
business.
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Northern CO
Competition
Talent
