| CBD office landlords, get ready. 'Cause you’re about to see your rents jump. | |
| We chatted with CBRE wunderkind S am DePizzol about his favorite submarket—the Denver CBD. Right now, he’s seeing vacancy at 7%, and that’s probably going down by year’s end, even with Hines Interests’ 400K SF addition. “Demand in the CBD remains strong, there’s no new construction coming on line over the next 24 months, demand for well-positioned core assetsremains strong in the investment markets, and the CBD will benefit from
Union Station.” Demand is even tighter for view space (defined as
availability above the 20th floor), now at 3%. This will result in continued pressure on downtown market rates, which have already experienced a 10% to 20% jump since the beginning of the year. | |
| Sam is scouting office space for his clients lately, including Denver notables Marsh & Mercer (needing 40k SF) and Cimarex Energy (70k SF). “In many ways, the current market reminds me of where we were pre-recession,” he says. The energy sector is, in large part, driving office activity in the local economy. He even cites 1801 California St, the 1.3M SF tower that Brookfield Asset Management purchased last year, as indicative of Denver office activity. “They have proposals out on 900K SF in that building.” |
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