CREJ - Building Dialogue - March 2017
Granite Place at Village Center “will be one of the premiere office buildings in the southeast corridor,” says Marshall Burton, managing partner at Confluent Development. He says the location can compete with downtown, as “a uniquely dense suburban location right next to light rail.” Landowner Koelbel “strategically kept this parcel open,” says Burton. “For two prior cycles, I had approached the Koelbels about developing it. They didn’t think the market was ready.” In early 2015, “They thought it was time.” Confluent inked an exclusive deal to develop it, and brought in Granite Properties, the multibillion-dollar office giant with offices in Denver as well as Atlanta, Dallas, Houston and Los Angeles. “All of a sudden, there was a great makeup of a team.” says Burton. “Granite is the horse behind this, without question. “The demand has been strong,” he adds. “If you look at the stock of office buildings in the southeast corridor, a large part of that stock was built before 1980. It’s increasingly functionally obsolete.” Because of improvements in efficient design, tenants often can downsize without down-staffing. “They can get the same functionality in 15 to 20 percent less space,” says Burton. “If you’re gaining 20 percent efficiency, that allows you to buy into the quality of the space we’ll offer.” Target Granite Place tenants include financial services, health care and telecom. Burton’s market outlook for the southeast metro area is rosy. “I think it’s going to be a good 24 months for the southeast corridor,” he says. “If you look over the past four years or so, there’s been significant office activity downtown and in southeast Denver, particularly around light-rail nodes.” Millennials are looking for a “24-hour, mixed-use environment,” he adds, and that’s emerging around transit stations in the south suburbs. Offices are moving south “because of the gap in pricing,” says Burton, noting it’s often $15 less per square foot. The demand is there now, he says, supply is on the way: “There's over 1.5 million square feet of office under construction in southeast Denver now. We're 300,000 square feet of that. “They’re all quality buildings,” he adds. “I think they'll all be successful. Southeast Denver isn’t going to see the headwinds of oil and gas.”