If you're at a cocktail party tonight, here are three lines about Denver office to get conversation going. (Another thing that gets conversations started: cocktails.) Thanks to Savills Studley EVP Jim McGrath for the data.
1) Energy Isn't Crushing The Market, But That's OK
Despite uncertainty in the energy sector, steady demand from the financial sector, tech companies and healthcare is pushing availability lower, says Jim. According to Savills Studley's Q1 2015 report, office availability stands at 16.3%, down 0.7 percentage points from Q1 2014. Class-A availability was likewise down 1.2 percentage points.
2) The Market Is Still Improving, Some Places More Than Others
The Denver metro market has seen growth for the past couple of years, "and we don’t anticipate that stopping in the near term," Jim says. One of the healthiest submarkets is the Southeast suburban—the largest in Denver, with a diverse industry base. Recently Jim, with colleague Tom Pappas, repped EPS Settlements Group in its renewal and expansion to 14k SF at 5613 DTC Pkwy; such expansion is fairly common now, and a mark of the market's health.
3) New Spec Is The Wild Card
The recent robustness has inspired development of a number of spec office buildings, such as 1601 Wewatta (pictured), 1550 Wewatta and 1800 Wazee, as well as more in '16 that "should change the dynamics," Jim notes. As usual in such situations, Class-B and older Class-A have the potential to suffer most, as companies trade up to new space, but job growth might keep absorption on track.
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