CREJ

Page 2 — Office Properties Quarterly — June 2020 www.crej.com Contents Letter from the Editor A s a quarterly publication, we enjoy a window between issues that typically gives us enough time to see trends emerging and markets shift- ing, but is frequent enough that we can keep a finger on the pulse of what’s happening in real time. At least that was the case, until COVID- 19 made its mark in Colorado. Since we last published, in early March, so much has changed as it relates to the workforce and office market – and there are even more unknowns. After working on this issue, I find myself compartmentalizing the office market into three dis- tinct periods: before, during and the unknown to come. The Colorado office market came blazing into 2020. Newmark Knight Frank reported that it was the 11th year of expansion. Employment was strong. The seven-country Denver metro region posted a historically low unemployment rate of 2.2% in December, and a Manpower Employ- ment Outlook Survey released in early March found that 27% of employ- ers surveyed planned to hire more employees in the second quarter, according to the June economic indi- cators from the Metro Denver Eco- nomic Development Corp. Downtown Denver bustled with strong absorp- tion, deliveries and investment activ- ity. Then everything came to a screech- ing halt. In a matter of weeks in mid-March, offices across Colorado shut down to comply with stay-at-home orders. At the same time, oil prices tumbled, sending an immediate shock wave to a large portion of the office sector. Unemployment skyrocketed, end- ing April at 11.9%, according to Metro Denver EDC. Even as stay-at-home orders expired last month, most busi- nesses found themselves in a transi- tion phrase regarding going back to the office. Truth be told, there’s a lot the industry doesn’t know – starting with the most basic: how, when and if people will want to come back to the office. People far more qualified than I discuss this within the issue. One thing is certain – the outlook for the remainder of the year certainly has shifted. As the Metro Denver EDC report states, “The office market will be challenged by oil and gas company downsizings in the short-term and may be adversely impacted later as workforce management and office design responds to changing space requirements and a potentially higher proportion of remote and flex employ- ees.” However, with any challenge, there is opportunity. These opportunities are what many of the authors in this issue chose to focus on. Learning from this experience will help create better buildings, relationships and long-term work strategies.While Colorado is not immune to these global challenges, the state enjoys a list of attributes that should help it rebound quickly. Michelle Z. Askeland maskeland@crej.com 303-623-1148, Ext.104 An unprecedented 3 months 4 5 6 8 10 11 12 13 14 15 16 17 18 Office absorbs a dual hit with COVID-19, oil prices Anthony Albanese and Nicholas Weld Lender approaches are changing for office space Peter Keepper and Jared Wiedmeyer Takeaways from the 2020 State of Downtown report Tami Door Good news, bad news for Boulder real estate Becky Callan Gamble Tenant strategies for office space post-COVID-19 Jim McGrath and Sam DePizzol What is the new normal for property operations? Mark W. Kennedy Local industry experts weigh in on office reentry Amy Aldridge Office buildings: Moving beyond the pandemic Jonas Philipsen Workplace design takes center stage in new era Rob Anderson and Gillian Baikie Brace for upcoming office space adjustments Carl Mesker Project managers adapt as their roles evolve Megan Walsh Instill tenant confidence following a pandemic Jessica Cole and Liz Taylor Building standards benefit landlords and tenants Tia Jenkins