CREJ - Office Properties Quarterly - December 2017
Covering the office market this year, I’ve noticed a recurring theme of coming change and the importance of flexibility. In general, the United State workforce is in a state of fluctuation, as baby boomers retire, Gen Xers and millennials play larger roles in business decision-making and, as the cover story outlines, we’re beginning to usher the iGeneration into our workforce. All of these changes have major implications on the way business is conducted, including its commercial real estate decisions. Locally, Denver’s office market also is adapting. Since the Great Recessions, we’ve seen a spike in office development, which was welcomed since most of the central business district’s previous office stock was constructed in the 1980s. The Denver market has been able to keep pace with these new developments, seeing relatively steady absorption and healthy vacancy rates. A large part of this success is due to our workforce – employees who are well educated and find the city to be a highly desirable place to work and live. However, we’re starting to see signs of small hiccups that could impact our future success. On face value, it’s hard to imagine that low unemployment could hurt the city’s reputation, but it’s happening for some companies considering relocations or expansions here, Liz Osborne writes in her article on Page 6. And, for the first time in what feels like ages, Denver did make a “best of” list that seemed like we’d be a shoe-in for – the MoveHub’s U.S. Hipster Index, which ranked cities for their attractiveness to young people. Additionally, it was reported in the Denver Post that in 2016, the number of people moving here dropped, the first time in a decade, and a record number of people moved out of the state. The final tally ended up in the plus column, with 30,000 new residents, but it’s less than previous years. Aside from being interesting indicators from a macro level, these factors all contribute to unknowns for many companies. For example, companies don’t know how quickly they will grow, which can make it difficult to assess how much space they’ll need. As commercial real estate professionals, by recognizing this need for flexibility, you can help clients feel prepared for the unknown. For example, on Page 18, Richard Smith shares how his firm designs mindful spaces that account for future expansion. I’m interested to hear from you about other techniques you’re employing to help manage clients’ trepidation as the workforce and workplace evolves. Michelle Z. Askeland maskeland@crej.com 303-623-1148, Ext.104