Downtown Denver’s Largest New Office Tower Ramps Up Occupancy, Thanks To Law Firms
Block 162 opened in April 2021 as the newest and largest office tower for downtown Denver since the onset of the coronavirus pandemic. Nearly a year later, the project is at last gaining traction with tenants, but remains largely vacant as market uncertainty keeps prospective tenants on the sidelines.
Like the rest of the Denver office market, leasing the 595K SF office has proven challenging, with just one lease for 60K SF signed at the time of the building’s opening in late spring last year.
Block 162 is now 20% leased with the announcement of its newest tenant, law firm Lathrop GPM. Lathrop is the fourth tenant to lease space at Block 162, taking 10K SF on the 26th floor of the building. All four tenants so far are law firms.
The tepid-but-growing leasing velocity at the property is mirrored in trends across the Denver metro area and in large cities across the country, where Covid-19 and the associated wave of remote work slammed the brakes on office leasing decisions, and in some cases, halted the development of new properties altogether.
But with its topping out scheduled for June 2020, Patrinely wasn't able to stop construction on the 30-story tower at 675 15th St. after the pandemic hit. Instead, the company doubled down on its marketing efforts.
“We had to work really hard to remind people that Block 162 was continuing to be built by our general contractor, Swinerton. That we were putting the pedal to the metal and we were real," David Haltom, regional vice president at Patrinely Group, told Bisnow. "There was a good bit of effort to communicate that with the brokerage community. We used development drone footage and other real-time imagery of the building to let people know that Block 162 was still rising."
The building’s first tenant, Sherman & Howard, moved into its new space in December, and the others are expected by the end of the calendar year, Haltom said. Offices in Block 162 are blank slates, making tenant improvements a lengthier process than it would be in an older building, but allowing for more customization for the latest trends in office use.
While tenant demand continues to lag supply in Denver, according to a JLL office report, companies "are increasingly searching for higher quality buildings to occupy" to entice workers back to the office.
"Demand in select areas like Cherry Creek, downtown Boulder and LoDo remains elevated, with occupancy well exceeding Denver’s average," the report said.
The legal industry is among those rethinking office space in the wake of the pandemic, seeking smaller footprints and modernized designs. Elements that were once considered indispensable, like law libraries, are now shadows of their former physical selves as weighty tomes full of case law are stored digitally.
“No other building can do what we’re doing right now, offering a full, clean slate," Haltom said. "Any company can come and build the premise they want to create the culture they need for their companies."
Law firms aren’t immune from the labor shortage that pervades nearly every industry in the U.S. right now, with a new office space serving as "part of a recruitment and retention strategy,” Haltom said.
“Our people are at the core of this move," Lathrop GPM Partner in Charge Patrick McRorie said in a release. "We are excited to embrace an entirely new design that gives us flexibility to be innovative and will allow us to provide the highest level of client service for many years to come.”
Lathrop GPM, created through the 2019 merger of Lathrop & Gage and Gray Plant Moody, will relocate from its current Denver location at 1515 Wynkoop St. when its tenant improvements are complete, slated for September.
"[Law firms] were absolutely one of our targets,” Haltom said. “But we believe in the end that we’ll have a diverse group of tenancy, including law, finance, energy and tech.”
Patrinely and development partner USAA Real Estate, along with a leasing team from Cushman & Wakefield, have more tenants lined up and expect more leasing announcements as the year goes on, ideally bolstered by a continually improving economy and a stabilizing leasing environment, Haltom said.