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March 2020 — Office Properties Quarterly — Page 21 www.crej.com Are your tenants uncomfortable? We can help. www.cmimech.com 303.364.3443 We love solving complicated mechanical problems. 45,000 people in 2015 but will slow to under 23,000 in 2020. n Residential real estate. Home sales in metro Denver rebounded in 2019, increasing 3.4% after falling 4.6% in 2018. In 2020, sales are fore- cast to increase by 2% to about 59,600 sales. Low interest rates are expected throughout 2020 and price growth should continue at a more modest pace as new supply is added to the market at a slower pace. New residential permit activity in metro Denver contracted by 16% in 2019 due to a large decrease in multi- family building permits. In 2020, resi- dential permit activity is expected to contract by 3% to 19,700 units. Still, this slowdown in construction activity is not a cause for concern as the level of activity will remain above the region’s historic norms and the number of new units added to the market is expected to outpace new household formation for the fifth consecutive year, leading to improving home affordability. Home price appreciation slowed sig- nificantly in 2019, falling from the 8% increase or more that occurred during the previous seven years. In 2019, the median home price increased 2.7% to $462,100, reflecting an increase that was lower than the national rate for the first time since 2012. In 2020, buyers and sellers will adjust to lower interest rates and home price appreciation in metro Denver is expected to tick up to 3.5%. The ongo- ing economic expansion fueling wage and employment growth will support the residential market in the year ahead. s Silverstein Continued from Page 4 As e-commerce increases competi- tion, retailers have turned to logis- tics to differentiate their offering. 4. More tech companies are on the way. Denver is currently the 10th largest tech market in the U.S., put- ting us in competition with places like San Francisco, Seattle and Aus- tin, Texas. Average office rents in the Denver area remain lower than many of these cities, making it an attractive market for growing com- panies. In River North, Class A new con- struction is asking approximately $35 per sf triple net plus $15-$20 per sf operating expenses. In Lower Downtown, office leases are running $35-$40 per sf NNN plus around $20 per sf OPEX. In Cherry Creek, which has seen a high level of new devel- opment in recent years, landlords are asking as much as $40 per sf NNN plus $22 per sf OPEX. Thanks to efforts by the Metro Denver Economic Development Corp. and other community leaders, dozens of tech companies, including Amazon, CircleCI, SendGrid, Slack, Robinhood, and Snapdocs, have recently opened or announced Den- ver offices. In October, Checkr signed a lease for over 92,000 sf in LoDo, making it one of the largest real estate transactions of the year. With favorable market conditions persist- ing, we anticipate continued growth in the sector in 2020. 5. RiNo and Cherry Creek will remain hot. Downtown Denver isn’t the only area adding large-scale development. Cherry Creek has experienced 23% growth in the office sector since 2013 and continues to be a magnet for developers. Additionally, RiNo alone has 1.4 million sf currently proposed, significantly contributing to the area’s continued success and economic growth. Major office projects underway in RiNo include: • Rev360: This five-story project along Brighton Boulevard will offer 140,000 sf Class A office space and 31,000 sf of creative retail space. • The Hub North: Slated for comple- tion in May, this eight-story project will provide a boutique workspace experience with ground-floor retail space. • Watershed: Offering 180,000 sf of office and retail space, this nine-story building also includes 30,000 sf of master-planned amenities, including an activated alley. • The Current, River North: This 12-story spec building includes 235,000 sf of office space with luxury ameni- ties. While a number of factors could affect continued growth this year – including rising construction costs, increased land prices and the presi- dential election – Denver’s strong eco- nomic fundamentals and projected population growth point to a positive forecast for the commercial real estate market this year and beyond. s Cullen Continued from Page 11 functional needs and aesthetic pref- erences. The goal was to create a seamless transition between each office and the central area such that clients could be guided from private to semiprivate spaces without notic- ing a disconnect. While the private offices of both areas are equipped with small con- ference rooms, the companies iden- tified a shared need for a large, high- caliber conference room, a casual breakroom and hospitality-driven kitchen amenities. The central area pulls in colors and materials from the attached offices, and relies on soft, neutral tones and clean modern finishes to compli- ment both. The program includes a 12- to 15-person conference room with advanced presentation technol- ogies and three-dimensional ceiling tiles that offer both sound absorp- tion and a textural element to the space. A glass wall with custom vinyl screen creates separation between the formal conference room and informal break room, capitalizing on shared light between the two spaces while minimizing distraction during meetings. To simplify issues of privacy and access, both companies are sepa- rated from the central area by latching pivot doors. n Optimized returns. The atypical leas- ing and design structure allowed both companies to maximize the efficacy of their office environments – benefitting from high-caliber office amenities, an expanded footprint and reduced over- all design and construction costs. As a result, both companies were amenable to longer lease terms. In fact, Fios Capital has recently opted to expand, claiming adjacent space on the seventh floor of 50Fifty DTC. While creative lease agreements and increased tenant demands have chal- lenged developers and realtors alike to imagine new models, these offices offer a simple solution that show- cases the potential of strategic alli- ances and shared commodities. s Tonsager Continued from Page 13