CREJ

March 2020 — Office Properties Quarterly — Page 11 www.crej.com Market Trends A s Denver settles into the first year of a new decade, it’s important to understand the trends that will help shape our rapidly grow- ing market moving forward. The Mile High City continues to attract corporate relocations, startups, job seekers and investors, fueling another strong year ahead across multiple commercial real estate sectors. In the fourth quarter alone, the Denver market had more than 2.34 million square feet under construc- tion. With little indication of a slow- down, here are five trends we can expect to influence the market in 2020. 1. Technology is transforming how we work. Tenant preferences are changing due to evolving employee needs and preferences, includ- ing flexible workspaces, accessible locations and advancements such as the Internet of Things and arti- ficial intelligence. As more tenants demand a highly connected envi- ronment, forward-thinking ameni- ties and technologies, owners are making the digital tenant experi- ence a core competency for their developments. Coworking space Common- Grounds, for example, now offers tech-enabled, soundproofed rooms, fiber internet and a member app that allows teams to control the lights, communicate efficiently, order coffee, book meeting rooms and more. Serving the remote working life- style, SmartSpace provides flexible workplace solu- tions such as virtu- al offices so entre- preneurs can have a business address without the added costs of a physical location. Rethinking how flexible office leas- ing is managed, Swivel launched a new platform that aims to streamline the entire experi- ence for landlords, brokers and ten- ants. Swivel serves as a third party that identifies available spaces in buildings where landlords are will- ing to offer much more flexible terms than usual to smaller occupi- ers. 2. Coworking spaces aren’t just for startups anymore. Despite WeWork’s initial public offering turmoil, new coworking concepts abound in Denver. Rising demand for flex- ible office space is a major driver in Denver’s thriving office market. The city’s flexible office inventory increased nearly 600% from 2014 to 2019, placing Denver among the top 10 flexible office markets in the U.S. More than 2 million sf of office space in Denver is devoted to coworking, and tenant demand isn’t slowing down. Contrary to a few years ago, these spaces aren’t just for startups seek- ing a temporary space before mov- ing into a more traditional long- term lease; even established tech giants like Ibotta and Facebook are opting for the flexibility of cowork- ing spaces. 3. Office, multifamily and industrial sectors are attracting more investors. The last quarter of 2019 marked the 38th consecutive quarter of positive net absorption in Denver’s boom- ing commercial real estate market. Office, multifamily and industrial markets remain the most-promis- ing product types for investors this year. Despite increased multifamily development efforts, demand for apartments continues to exceed supply. Last year, the metro Denver area’s population increased to more than 3 million people – a growth rate that has consistently outpaced the national rate since the 1930s. By the end of 2020, metro Denver’s population is forecasted to reach more than 3.3 million. As more people move here, many are seek- ing low-maintenance apartment lifestyles. Demand for industrial space is also attracting investors to the mar- ket. CBRE’s annual survey of com- mercial real estate investors ranked industrial as the most sought-after property type and also rated Denver as the fifth-most attractive market for investment. What’s fueling the increased demand for industrial space? The shifting retail landscape. 5 commercial real estate trends to watch in 2020 Andy Cullen Managing broker, Tributary Real Estate Tributary Real Estate Rev360 is under construction on Brighton Boulevard in Denver’s River North Art District. Please see Cullen, Page 21