CREJ

Page 2 — Office Properties Quarterly — December 2018 www.crej.com Contents Letter from the Editor L ast month, WeWork announced new leases in sev- eral properties in downtown Denver. Once all are opened in 2020, the coworking behe- moth stands to be the largest office user in the city. The additions include seven floors in the Tabor Center and five floors in the Wells Fargo Center. Several properties under construction also will host WeWork space, includ- ing the HUB build- ing in River North, the Circa Building, a new property at 3600 Brighton Blvd., and the Vault build- ing. This will bring the grand total square footage leased by WeWork to 592,600 square feet, according to Stacy Taubman’s article on Page 12. WeWork is following the same trend in Manhattan as well. In September, it was announced that the firm will be the largest private office tenant in the city that never sleeps. Overall, the coworking market seems to be favorable for our office landscape. As aggregators of small tenants, they can help landlords by leasing larger blocks of space, a pan- elist at the Colorado Real Estate Jour- nal office conference in September told the audience. While every now and again they may steal a little mar- ket space, the benefits outweigh the concerns, he said. However, another panelist brought up concerns regarding fears of shadow space specifically relating to WeWork. He mentioned that as the largest office user in the city, the fact that it’s a third-party vendor should cause some hesitation. If the econo- my takes a turn, will people still be flocking to coworking facilities when working from their home or local cof- fee shop doesn’t include such a hefty monthly price tag? This reasonable question is even more relevant when you look at recent statistics about our commu- nity’s coworking presence. Denver has the fifth-most coworking spaces per 100,000 people in the nation, according to a study by Simple Tex- ting. What’s more, Colorado reported the most expensive average monthly cost to rent a coworking desk in the nation, coming in at $1,250 per month, according to the same study. Massachusetts, California and New York trail us, at $1,213, $1,079 and $1,063, respectively. (At these rates, the study found that it is still more cost-effective to rent 100 sf of office space for one employee than the cost of Colorado’s average coworking “desk pass,” based on the way the study calculated it.) Right now, most of the coworking activity is centered in the central downtown area, which is keeping pace with increasing downtown rates, as 68 percent of coworking facilities rent their space, according to Taubman’s article. We’ll see if 2019 pushes coworking spaces further into the suburbs, as rooftops, retail and jobs move to these slightly less expensive areas. Michelle Z. Askeland maskeland@crej.com 303-623-1148, Ext.104 WeWork’s growing presence 4 6 7 8 9 10 11 12 13 14 15 16 17 Office pipeline: If you build it, they will come Steve Billigmeier 2019’s financing forecast reveals optimistic lenders Mark Jeffries Midmarket offices: An untapped investment sector James Brady, Campbell Davis and Rachel Shanahan A discussion about the downtown Denver market Lauren Douglas Design for human health provides financial returns Jeremy Attema Tenants get more creative in real estate decisions Andy Cullen BOMA 2017 standards create shared benefits Tia Jenkins Female-focused spaces fill needed coworking niche Stacy Taubman Green buildings create happier, healthier workers Patti Mason Colorado C-PACE is becoming a national leader Tracy Phillips Human-centric design for the modern workplace Kay Sargent The importance of welcoming entry spaces Brandt Vanderbosch Reimagining Denver West for the next generation David McCleve