Page 2 — Office & Industrial Quarterly — September 2021 www.crej.com Letter from the Editor A s the pandemic battle rages on, it seems we’re in another critical quarter of the wait- and-see game.Wait and see what will be the result of the expired federal unemployment ben- efits; wait and see what will come from the new federal vaccine/test- ing mandates that will impact nearly 800,000 Coloradans; wait and see what will come from the new COVID-19 vari- ants and schools being back in ses- sion; wait and see how rising construc- tion costs are going to impact the pipeline; the list goes on. With so much in limbo, it’s clearly not the time to make major proclama- tions about the future of office, and yet there are positive market indica- tors highlighted within this issue to offer glimmers of hope for the remain- der of the year and beyond. For example, those active in the office investment market across the Front Range had busy summers and are finding interest in unlikely places. While deals are being scrutinized more than ever, there’s capital on the sidelines looking to diversify after focusing heavily on industrial and multifamily earlier in the year. If an office property ticks the right boxes, there’s an audience for the deal. And it’s not just from the big money sources. Businesses looking to own their own properties are active as well, Jeremy Reeves writes on Page 8. Additionally, pre-pandemic, office design seemed to be fluctuating between open floor plans for all with a pushback for private space. It seems the pandemic ushered in some clar- ity on the need to fine-tune both approaches to match the melding of a hybrid worker. A space needs to capitalize on the collaboration people longed for while out of the office, but also recognize the necessity of provid- ing “quiet space” some can’t achieve at home. On the industrial side, the general proclamations of a thriving market are easily stated and strongly supported by the statistics from the articles with- in. However, even the thriving market is not immune from the wait-and-see game this quarter brings. While Colorado’s industrial develop- ment activity is robust, rising project costs, limited land and complicated project timelines all present chal- lenges. As the section’s cover story on Page 21 states, consumer behav- ior has shifted and it won’t be going back. People expect quick delivery of all things purchased online – mak- ing last-mile distribution, fulfillment centers and freezer storage prominent market players. The problem is these assets by their very nature need to be near the population centers, yet the mentality of many city planners that industrial is a less-than-ideal land use is creating hurdles to finding land, and the rezoning timeline can halt a proj- ect altogether.We’ll have to wait and see if community planners can recog- nize the importance of the shift and make these projects easier to green light. Michelle Z. Askeland maskeland@crej.com 303-623-1148, Ext.104 Another round of wait and see OFFICE 4 6 8 9 10 11 Office investors can’t get enough of Denver area Larry Thiel and Jason Schmidt Excitement throughout Springs office market Peter Scoville and Greg Phaneuf Owner-user office sales represent a bright spot Jeremy Reeves Relevant indicator tracking provides market pulse Zain Jaffer State of office financing: Denver 2021 midyear Mark Jeffries Denver South launches back-to-office initiative Sheryl Machado and Erin Schneiderman 12 13 14 15 16 21 22 24 26 28 Community developers keep industrial on the back burner Matt Trone, Joe Krahn and Joey Trinkle Industrial real estate demand outpaces supply Kathryn Hamilton How Denver’s footprint stacks up nationally Irina Lupa Denver’s hot industrial market continues its streak Brandon Kramer Leasing activity paints picture of Northern Colo. Joe Palieri 30 31 32 32 INDUSTRIAL Contents Zoning an office space for hybrid worker success Tia Jenkins Top post-pandemic workspace design changes Cecilia Hanover Rising costs, delta variant may stall return to office Peter Brumley How to design and build for the unknown future Joel Pennick The value of an asset’s high- performance landscape Jessica Petro Private & institutional capital allocations shift Garrett Neustrom and Jules Sherwood The demand driving the great industrial land grab Jason White Colorado leads the way for industrial development Megan O’Brien and Jeremy Kroner Short-term challenges bring temporary disruptions Keith Kanemoto A NEW VISION IS REALIZED Introducing the modern experience you have been waiting for to enhance your client and employee arrival at Republic Plaza. VIEW THE NEW ARRIVAL .