INSIDE
by Michelle Z. Askeland
With property taxes steadily
increasing, commercial real estate
helping to fund large city initiatives
and potentially mandated sustain-
ability improvements, the cost of
owning property in Denver is rising
at a rapid pace.
“We are the caretakers for our
owners in terms of their assets,” said
Dan Simpson, who serves on the
Denver Metro Building Owners and
Managers Association board of direc-
tors. “We have a fiduciary responsi-
bility to our owners. Keeping operat-
ing expenses down and focusing on
the driving investment performance
for our clients is key.”
While the major management
associations recognize there are
needs the city must address and rec-
ognize that increased property val-
ues can help building owners, there
are calls that the city is unfairly rely-
ing on commercial real estate as a
large funding source.
“I think what a lot people don’t
understand is that those expenses
eventually get passed back through
to the end user,” said Tiffany Jackson,
who serves as the chair of the leg-
islative committee for the Institute
of Real Estate Management Greater
Denver Chapter 17. “Whether it’s in
a commercial office building or in an
apartment complex, it gets passed
through in the form of rents.”
There is fear among some that
all of these costs could combine
to create a perfect storm in which
tenants and owners must consider
other options. “When you look at
the spread between both rental rates
and operating expenses in the cen-
tral business district vis-à-vis the
suburban office markets, if you’re
a savvy business owner you cer-
tainly have to weigh those spreads,”
said Simpson. “At some point, if it
becomes too expensive, people will
vote with their feet and go else-
where.”
The best way for managers to help
their clients as well as their tenants
is to stay educated and get involved.
Organizations like BOMA and IREM
offer opportunities not just to stay
informed but also to have a voice.
Following are overviews about
three specific Denver challenges
property managers should know
about.
Property taxes.
There are two com-
ponents to commercial property
taxes – the property’s assessed value
and the mill levy. Every other year,
the Denver County Assessor’s Office
issues property values based on
sales. In order to be in compliance,
properties need to be within 5 per-
cent of fair-market value. The pur-
chase prices in 2015 included many
record numbers, which ultimately
