Recently Transwestern tapped Lee Wallis as managing senior vice president in the company’s Asset Services group, based in Denver. Previously he was with Hines as vice president of operations-Southwest. Here are his thoughts on the Denver market.
Bisnow: What is your outlook for the health of the Denver commercial real estate market — rent, vacancies, investor interest — in the near to mid-range, and why?
Wallis: Denver is well-positioned to remain stronger than other markets. That's because the existing infrastructure, business climate and quality of life continue to attract people and companies. Fundamentals like continued job growth and diversity of new and expanding businesses support a positive outlook for Denver’s commercial real estate market.
That said, we're currently in a period of uncertainty, and after two to three years of tremendous growth. There's been a reduction in the number of active investors and a flattening in rental rates.
Bisnow: What is a solid strategy for asset value enhancement in the current market?
Wallis: New modern office buildings offering extensive amenities combined with increasing tenant expectations are creating an "arms race" in building amenity standards. Owners of existing buildings are challenged to create environments and experiences that meet the expectations of today’s tenants. Tenants want office space that supports recruiting and retention of their employees.
Bisnow: Is that a reflection of the impact of Millennials on the workplace?
Wallis: Yes. The most popular amenities now include (indoor and outdoor) WiFi-enabled collaborative workspace, extensive fitness centers and locker rooms, healthy food and conference/training facilities. Outdoor recreation, like bocce ball or putting greens, is also popular.
Last, but not least, personalized, responsive property management service creates high tenant satisfaction. That is critical in supporting tenant retention.
Bisnow: Is there anything that keeps you up at night, and if so, what?
Wallis: Clients and tenants now expect a higher level of service and advice from their real estate provider. Thinking about how we can improve our service to elevate our performance, while exceeding their expectations, is something that keeps me up at night.
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