Colorado Real Estate Journal - May 6, 2015
Opening up a large block of office space in the Walgreens building on the 16th Street Mall wouldn’t have made economic sense five or 10 years ago. Today it almost doesn’t make sense not to. Downtown Denver’s rising rental rates – especially for new construction – and a shift in the type of space many tenants are looking for have created new opportunity for the longunused, unnoticed second floor of the building at 16th and Stout streets. The space will have a lobby entrance off the mall, 18-foot ceilings, banks of windows on two sides, new lighting and the potential for a rooftop deck, all at $13 to $18 per sf triple net, depending on the level of finish. That’s roughly half the cost of new construction in Lower Downtown and Cherry Creek. “We’re really excited about this. We think it’s the right place at the right time,” said Steve Cohen, who is part of a group that has owned the building for more than 40 years. “To have 18,000 square feet on one floor right now on the mall is not an option anywhere else,” said Jon Tilton of Newmark Grubb Knight Frank, who is marketing the space with NGKF brokers Tom Lee and Alyssa Mischell. The office space will be delivered by the end of June. “It’s a good opportunity for a company to put their own stamp and design and image into their space and have a great identity. It can be as grandiose or as simple as they want,” said Tilton. A technology company, architectural firm and nonprofit collaborative have toured the building, which is suited to organizations seeking open, collaborative space, said Tilton. Even more traditional professional services firms are beginning to look outside the typical office space box. “I think everyone is starting to see the value and getting excited about something other than the traditional office tower,” he said. “This type of space is kind of a new phenomenon. This is now what everyone wants. They want hip. They want unique. They want fresh.” The building owners undertook the project as part of Walgreens’ 5,000-sf expansion to create a flagship store that will include offerings new to the drugstore chain in Colorado. Mark Young Construction Inc. is the contractor. Gary Desmond of Projects Workshop is the owner’s representative for the office space. The building will have an entirely new façade, and Cohen believes being above Walgreens will have a lot more positives than negatives. He’s long been told the building is the best location in downtown Denver because everyone knows where it is. There’s a light-rail stop outside the front door. “This obviously is an exciting and huge upgrade to this corner,” said Tilton. “It seemed like the time was right to open the second floor up, improve it – new windows, new lighting – and posture it for lease in our very exciting city,” said Cohen. “What’s exciting, first and foremost, is what’s happening in the Denver metro area. This town is on fire. You don’t have to be a demographer to understand what’s going on here.”