CREJ

Page 16 — Office Properties Quarterly — June 2019 www.crej.com Denver: 4582 S. Ulster St., Ste. 1500 • Denver, CO 80237 • 303.228.2300 Colorado Springs: 2 N. Nevada Ave., Ste. 300 • Colorado Springs, CO 80903 • 719.453.0180 Aspen: 16 Kearns Road, Ste. 212 • Snowmass Village, CO 81615 • 970.429.8855 FORTUNE M A G A Z I N E ’ S WE ARE ONE OF COMPANIES TO WORK FOR SERVICES Land Development Office/Campus Retail Single Family Multifamily Stormwater Data Centers Traffic Roadway Infrastructure Industrial Build-to-Suit Landscape Design Planning ENR RANKINGS #20 of the Top 500 US Design Firms #7 of the Top 100 Pure Design Firms #2 for Retail #2 for Multi-unit Residential #7 for Airports #9 for Highways #8 for Solar Power #8 for Transportation #10 for General Building #16 for Mass Transit and Rail #16 for Water Treatment and Desalination #18 for Sanitary and Storm Sewers #29 for Water Supply #43 for Sewer and Waste Explor e Kimley-Horn.com f or more information. Market Trends A s the expectations of the workforce continue to evolve in Denver, the work- place of today and tomor- row looks significantly dif- ferent than it did even a few years ago. From the length of leases to the evolution of coworking to the importance of memorable finishes and amenities that matter, owners cannot overlook anything to attract and retain top tenants in a market as strong as Denver. In 2018, the Denver metro area absorbed approximately 2 million square feet of office space. With steady demand from tenants either growing or relocating to the Mile High City, this trend is expected to continue. The biggest challenge for owners is figuring out how to dif- ferentiate their assets to meet the changing demands of tenants. Fol- lowing are some key questions to keep top of mind. • What expectations are tenants bringing to the table regarding their leases? Coworking spaces have changed the leasing game. With more than 20 coworking operators in downtown Denver alone, this type of office space solution has found considerable traction. Known for offering shorter-term leases, these spaces offer appealing flex- ibility to many tenants. As an owner, companies have the opportunity to rethink leasing strategies to meet tenants where they are – whether that’s working with a shorter-term lease or helping companies understand the benefits of longer-term leases so they can effectively and easily grow within a specific portfolio. Coworking spaces also offer shorter lease agreements (think two pages versus 20 pages). This streamlined approach is some- thing the com- mercial real estate industry needs to embrace to help reduce the burden placed on tenants during the leasing process. • In light of shorter-term leases, what’s a good phi- losophy for building out tenant spaces? It is imperative to be thoughtful about tenant build-out and try to create generational space that will last 10-plus years, even if a tenant only signs for two or three of those years. That means choosing time- less finishes, creating a flexible, adaptable design, and paying close attention to details that matter, like making sure the kitchen is located in the right spot. Staying involved in the process as much as possible not only strength- ens the owner-tenant relationship, but also helps ensure your asset remains competitive down the road. • What are tenants looking for in terms of amenities? While in-building amenities – including fitness cen- ters, showers, lockers and commu- nity spaces – continue to be a sell- ing point for some tenants, there is an undeniable shift toward loca- tion-based amenities that promote flexibility and convenience. With more companies supporting flexible work schedules, employees want to be able to come and go as they wish to run errands, pick up children from school, get their hair cut, go to the doctor, etc. They also want to be able to step out of the door and be within walking dis- tance to restaurants, bars, retail and other entertainment options. This is one of the primary reasons we concentrate our portfolio in urban areas, like downtown Denver and Boulder’s Pearl Street. Being centrally located provides tenants with the opportunity to engage and become part of the larger commu- nity. • What’s next for office space in Denver? While new construction will continue throughout the metro area, Denver also is going to see a resurgence of second-generation buildings. Throughout the central business district and surrounding neighbor- hoods, many buildings are getting a face-lift to attract desirable ten- ants. In Denver’s Lower Downtown neighborhood, for instance, the for- mer Gates building, located at 1551 Wewatta St., is being overhauled to accommodate the new headquar- ters of VF Corp., which is relocating from North Carolina. Similarly, the historic Elephant Office tenant expectations continue to evolve Sarajane Goodfellow Associate regional director, Unico Unico The historic Elephant Corral on Wazee Street underwent an extensive renova- tion to help attract new tenants, including fitness track app Strava, which signed a 20,000-square-foot lease. Please see Goodfellow, Page 22