CREJ - Office Properties Quarterly - September 2017
The new Rocky Mountain Technology Boulevard is being forged in the foundations of the former iron works, smelters and other industrial uses that once dominated Denver’s River North neighborhood. In just a few short years, RiNo has transformed from its owner-occupied industrial origins into a vibrant community featuring a cadre of highly creative companies, cooperative workspaces, brew pubs and eateries, and an eclectic arts scene. If this seems like a stretch, let’s look at particulars. Pioneering projects like Mickey Zeppelin’s Taxi project transformed a vacant dispatch center and corporate headquarters into flexible workspace 10 years ago, initiating RiNo’s revolution. Investors took note of the transforming neighborhood and infused the area with capital. Today, new and under construction projects like Industry, Catalyst and Zeppelin Station feature flexible work and creative spaces and evolving ecosystems that attract the mushrooming nimble technology startups integral to the area’s evolution into a technology corridor. Colorado-based Home Advisor reaffirmed its intention to move its headquarters from Golden to RiNo, recently committing to 58,000 square feet at The Hub, which broke ground in August. Boston-based Beacon Capital Partners recently purchased the 2-acre site, allowing the stalled project to proceed. Also breaking ground this year is Phase I of Formativ’s new World Trade Center campus, featuring a 200,000-sf international business and trade ecosystem to house best-in-breed large and small international businesses, representing industries and innovative technologies from around the globe. The National Renewable Energy Lab and the University Corporation for Atmospheric Research recently announced their intention to partner to launch “The Colorado Innovation Corridor” on the campus to better connect the national research facilities with public and private sectors. Numerous other projects are under way or in the planning stages in RiNo. Westfield’s Midtown Industrial 14-acre site could develop up to 1 million sf of mixed-use product. Given the proximity to the 38th Street A Line station and immediate access to Interstate 70, this project is expected to attract large corporate users wanting a campus environment, as well as smaller creative and startup companies. It is not hyperbole to say Colorado is poised to become the AgTech capital of the world. Consider the state’s agricultural roots combined with our innovative tech culture, pool of highly educated and motivated workers, capital influx and ongoing infrastructure investments – these factors combine to position the area as the “Silicon Valley of agriculture,” as noted by the University of Colorado back in 2014. RiNo – and the Brighton Boulevard corridor/National Western Complex redevelopment project, in particular – offers an interesting union of Denver’s agricultural history and its innovative tech scene, combining to elevate the community into the Rocky Mountain Technology Boulevard. Colorado State University, the state’s land grant university, is a founding partner in the National Western Complex project, with state funding of $200 million to construct the CSU Water Resources Center, a facility for equine medicine and the multimodal CSU Center on site. RiNo’s access to fiber is another drawing point. The Fortrust Denver data center, located in RiNo, is the largest data center in the region with over 300,000 sf and 34 megawatts of data center capacity. This capacity provides an optimal power infrastructure and connectivity to safeguard mission-critical business services, which is critical to today’s technology-focused tenants. This development boom in RiNo, and also in the Platte Street neighborhood, is literally changing Denver’s central business district. As a result, our research redrew its office submarket boundaries to move these neighborhoods from the Midtown submarket to the Lower Downtown/Central Platte Valley micromarket. “These buildings – whether redevelopments or new – compete with the CBD for tech, creative tenants and corporate tenants,” said Lauren Douglas, NKF’s Colorado director of research. “The resulting expanded submarket, renamed the downtown submarket, will provide a clearer and more precise snapshot of the Denver office market, both now and in the future.” As of second quarter, the downtown submarket led the overall Denver office market with year-to-date absorption of 370,393 sf (total market absorption was 385,414 sf). The LoDo/Central Platte Valley micromarket, home to the vast majority of the submarket’s coveted new construction, continued to outperform the Skyline and Uptown micromarkets; LoDo/CPV posted yearto-date absorption of 286,331 sf, while Skyline and Uptown logged absorption of 30,977 sf and 53,085 sf, respectively. The RiNo and Platte Street neighborhoods currently offer a relatively small amount of office space – just over 775,000 sf – and more than half of this inventory was delivered during the current development cycle. A snowballing construction boom will deliver almost 600,000 sf of office space in five projects in RiNo alone by 2018, representing 31 percent of the current downtown pipeline totaling 1.9 million sf, with another 2.5 million sf planned in RiNo. In fact, there is more development in terms of the amount of buildings either under construction or well into the planning stages than any other neighborhood in Denver – positioning the area to double or triple in size. With Industry, Zeppelin Station and Catalyst boasting some of the biggest names in tech, both locally and globally, and the National Western Complex with its potential to be the AgTech capital of the world, the RiNo neighborhood is not so quietly emerging as a technological hub.