CREJ - Office Properties Quarterly - March 2016
On April 22, the RTD’s A line opens, running from Union Station to Denver International Airport. The long-awaited opening will usher in a new age of transportation, putting us on the map with other domestic and international cities touting easy public transit from airports to city centers. DIA is taking steps to ensure its offerings are ready with the new onsite Westin Hotel, a public transit center, an expansion of the C Concourse and new destinations such as the nonstop flights to Munich and Tokyo. The airport dining experiences are becoming more Colorado-specific, including a project between Tivoli Brewing Co. and Tom’s Urban, which will join other local airport successes like Elway’s, Smashburger, Root Down and CRÚ. The FasTracks line to the airport helps Denver on its mission to become a world-class city. For the office market, this means three things. First, it makes Denver a more competitive city for attracting businesses. Of our regional competitors, Denver has an advantage. It was a determining factor for Panasonic, which recently selected Denver for its Panasonic Enterprise Solutions Co. offshoot. The 400-acre development at the 61st and Peña Boulevard light-rail station is the first stop from the airport. “Panasonic looked at 22 cities across the country and picked Denver, and then picked that site because of the transit,” said Tom Lee, executive managing director with Newmark Grubb Knight Frank. The location was ideal for the company to hire the kind of people they want and to offer easy proximity to the airport, he said. Second, for investors, it’s one more check on a list in determining a prosperous location. This is exemplified by the fourth-quarter purchase of the CoBank Center in the southeast submarket by Samsung SRA. The transit-oriented development was acquired for $113.5 million, or $413.67 per square foot. It was the first Asian institutional capital invested in the Denver office market in the cycle, according to a CBRE report. And third, the line makes all TOD more desirable. It will drive demand as tenants seek offices along the lines. “People have been excited about having a direct line to the airport for years,” said Geoff Baukol, executive vice president with the CBRE capital markets division. “I remember interviewing tenants on a building we sold in 2011 that was a block from Union Station and they were really excited about the DIA line and it was five years away.” Michelle Z. Askeland maskeland@crej.com 303-623-1148, Ext. 104