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Page 12 — Office Properties Quarterly — December 2017
T he Denver commercial real
estate market has evolved
considerably from the days
of the oil and gas economy,
when occupancy and rents
were closely tied to the boom and
bust of the industry.
But until recently most business-
es, regardless of type, still stuck
to traditional commercial space
requirements, such as the prox-
imity of services like restaurants,
gyms and retail, as well as property
attributes, like large floor plans
with multiple levels, expansive
parking structures and prominent
addresses. As a result, Denver area
office space has been concentrated
in central business districts like
downtown and the Denver Tech
Center for decades.
And as the market has grown and
changed, so has the idea of what
makes the perfect office space.
Consider these facts:
• In 2015 (the state’s most recent
data), 89 percent of Colorado’s
businesses had fewer than 20
employees and 63 percent of all
employees worked for a company
with less than 100 workers.
• Colorado has a higher concen-
tration of professional services
than the national average – and
these jobs are more easily done
from a variety of locations and
don’t always require traditional
office space.
• Nearly 7 percent of Coloradans
telecommute full time – the high-
est rate in the
nation.
Pair these facts
with the dramatic
increase in the
number of solo-
preneurs and free-
lancers in today’s
workforce – popu-
larly known as
workers of the “gig
economy,” and we
start to see why
the ideal office
location is chang-
ing for businesses and employees
across the Front Range.
In 2013, more than 78 percent of
small businesses in Colorado were
defined as “nonemployer firms,”
which by definition are businesses
who employ no workers, but have
gross revenues of at least $1,000
per year (or $1 in construction).
And we’re not just talking about
Uber drivers who are not typically
in the market for office space. In
fact, workers in areas like profes-
sional services, real estate and con-
struction make up more than half
the “gig economy” here in Colo-
rado, while Uber drivers and Airbnb
hosts combined make up less than
5 percent of the market across the
state.
As a result, we now see office
space in previously industrial
areas turned mixed use – like River
North, the Golden Triangle and
Lower Highlands – that share a
new set of characteristics sought
after by today’s employers and
employees. Among them are prox-
imity to residential (often multi-
family) housing, smaller and more
unique building floorplans and
sizes, and access to restaurants,
grocery stores, outdoor spaces and
public transportation, such as light
rail. To be clear – access to nearby
services, such as restaurants and
gyms still matter – but they share
the limelight with these other pri-
orities.
The trend becomes very clear
when we look at the location of
co-working spaces in the metro
area, which can be found more
often than not in historically non-
business centers from Sunnyside
to Glendale and beyond. When we
look more closely at the metro area
neighborhoods that are home to
co-working spaces, we see several
common traits:
• More renters than homeowners;
• Above-average access to grocery
stores and restaurants; and
• A good mix of single-family and
multifamily units.
Based on these trends, don’t be
surprised if sometime soon you
see similar facilities popping up in
areas such as City Park West, May-
fair or Centennial – all of which
share many of these same charac-
teristics.
With workers and companies
continuing to be more comfortable
with nontraditional work settings,
and “workforce sprawl” persisting
outside of the urban core, what can
commercial property owners and
brokers do to attract employers of
all types and sizes?
First, they can position traditional
property assets in a new context.
For example, consider market-
ing shared spaces like atriums or
lobbies as a collaborative work or
meeting space that extends a busi-
ness’s private office space.
Second, demonstrate a willing-
ness to subdivide larger spaces to
accommodate smaller teams, a
part-time workforce or telecom-
muters who can share spaces at
different times.
And third, brokers must make it
easier for clients to compare loca-
tions across the metro area by
helping them prioritize their needs
and put neighborhoods with simi-
lar attributes in context based on
those needs.
There’s no question that Denver’s
economy has never been more
dynamic, and the demand for new
and different types of office space
is just one example of our diversi-
fied growth. As rents in hot areas
around the city continue to march
upward, traditional office space
shouldn’t be counted out. Owners
and brokers can feature specific
assets in a new light and make
minor adjustments to put these
properties into new context for
today’s workforce.s
BIG OPPORTUNITIES ARE AVAILABLE
IN DOWNTOWN SUPERIOR.
Just outside Boulder and a short commute from Denver,
a vibrant, new Downtown Superior is taking shape. This
urban hub offers land for office and mixed-use residential/
retail, plus new office and retail space built to suit. The
area offers competitive economics, easy access to Denver
International Airport, an educated employment pool and
a sought-after location. It will be an energetic, eclectic
mix of retail, shopping, dining, entertainment and living—
walkable, sustainable and surrounded by acres of gorgeous
Colorado open space.
Fully entitled for up to 817,600 square feet of office,
retail and restaurant space; 1,400 residential units;
and 500 hotel rooms.
Visit
FRESH OPPORTUNITIES FOR BUSINESS,
RESTAURANTS, RETAIL AND MORE.
That’s a Superior idea.
Market Trends
Mike Mauseth
Co-founder,
MapVida, Denver