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Page 6 — Office Properties Quarterly — June 2019 www.crej.com Market Update PIONEERING RESIMERCIAL DESIGN 2901 Blake Street, Suite 100 Denver, Colorado 80205 303 861 - 8555 info@davispartnership.com THE INTERIOR DESIGN STUDIO AT DAVIS PARTNERSHIP ARCHITECTS U C H E A LT H Marketing Offices F inding the right office space to call home is never as easy as it seems. Multiple fac- tors – from building type to size to amenities to location – require thoughtful consideration to ensure a company finds a space that not only resonates with their mission, vision and values, but also supports employee attraction and retention. As a state, Colorado continues to attract a highly educated workforce. At the end of 2018, the Denver metro area alone had a labor force of 1.83 million people, 45% of whom have a bachelor’s degree or higher. While the talent pool has grown, so has compe- tition from businesses moving here to take advantage of it – think Ama- zon, VF Corp., WeWork, Slack, Xero and Strava. One of the most critical factors in attracting and retaining top talent is the work environment. Companies are increasingly prioritizing employee values and preferences while navi- gating their real estate strategies. Unsurprisingly, at the forefront of that discussion is location. As of the first quarter, downtown Denver had 40.3 million square feet of office space with a vacancy rate of 17.9%, hovering at a four-year low. While it is no surprise that compa- nies are gravitating toward the com- mercial heart of Denver for its appeal to a younger workforce and central accessibility to the rest of the metro area, a growing number of businesses are finding reasons to grow outside of the central business district. • West Denver. Largely viewed as a sleepy submarket over the past sev- eral years, the west side of Denver is seeing a resur- gence of activity. The $143.65 mil- lion sale of Denver West Business Park marks a shift in perception of what the west can offer. Located in relative- ly close proximity to the mountains, this submarket appeals to com- panies looking to attract multigenerational employees who value a more attainable quality of life, an active lifestyle and a short commute. As of the first quarter, the area offered 15.7 million sf of office space, up 1.8% from the prior period. With a vacancy rate of 10.1%, it is clear this submarket remains desirable, especially with an average rental rate of $22.68 per sf (compared to downtown Denver’s average rental rate of $34.59 per sf). • Northwest corridor. Offering 30.5 million sf of office space with a 12.8% vacancy rate, the Northwest corridor is home to several big name companies including Vail Resorts, Webroot (recently acquired by Car- bonite), Sierra Nevada Corp. and PopSockets. One of the newest addi- tions to this lineup is Crocs, which will relocate to Broomfield from its Niwot headquarters in 2020. The biggest appeal for companies located along the Northwest cor- ridor is access to highly educated talent pools in both Denver and Boulder. With an average rental rate of $27.44 per sf, this corridor also offers a distinctly Colorado experi- ence at a lower price point than either downtown Boulder or Denver. With views of the Front Range and hundreds of acres of open space, this area is perfect for employees looking for an outdoor lifestyle with easy access to biking, hiking and running trails. • Glendale/Cherry Creek. The area from Cherry Creek North to Colo- rado Boulevard and Interstate 25 has seen some notable activity in the first part of 2019, from the open- ing of Amazon Books in the Finan- cial House building in Cherry Creek North – which was fully leased upon delivery with record-breaking rates – to the sale of Glendale’s tallest building, Elevate, for $35.75 million. With 14.4 million sf of office space, the area had a 12.4% vacancy rate as of the first quarter. Offering a variety of building types and spac- es, this area remains a viable option for many tenants. While the average rental rate in this area is $27.30 per sf, there is a significant price differ- ence between newly built Class A office space in Cherry Creek North and second-generation buildings along Colorado Boulevard, which creates a dynamic mix of business- es that call this area home. • Denver Tech Center. While it may not boast the urban appeal of downtown, the Denver Tech Center is equally significant from a com- merce perspective in the metro area. Thanks to the influx of major corporations over the years, south Denver remains a major commercial hub. Kiewit Corp., a Fortune 500 con- struction and engineering com- pany based in Nebraska, recently announced it selected Lone Tree as the location for its new region- al office. Real estate company Schnitzer West also acquired a site across the street from Fiddler’s Green Amphitheater in Centennial that is entitled for up to 1 million sf. As of the first quarter, this area Opportunities blossom in Denver’s submarkets Andy Cullen Partner and managing broker, Tributary Real Estate Please see Cullen, Page 21 Tributary Real Estate