Hundreds of BusinessDen readers joined us on Zoom Wednesday morning for The Future of Office Space, our panel discussion on how that sector will look as we emerge from the coronavirus pandemic.
Attorney Tom Downey of Ireland Stapleton Pryor & Pascoe moderated the discussion with our four panelists, key local players representing the complementary worlds of landlord, developer, broker and coworking operator.
Click the video above to watch highlights from the discussion or read on for some of the key quotes.
Austin Kane, vice president and regional director, Unico Properties
Seattle-based Unico owns and/or manages numerous office buildings in and around Denver, and has also developed locally.
“I reached out to our property management team and right now we’re estimating only 20 to 25 percent are back into the office at this point.”
“On rare occasions, we have tenants who have cruised right through this — super stable, know exactly what their business is going to look like — and say, hey, I don’t know if you’ve read the papers recently, but this pandemic’s had quite an impact on the office market, what can you do for us. And I will tell you our posture in almost all of those cases is we’re going to be really open-minded. We do not want to have to re-tenant space if we can help it.”
“We’ve already looked at it ourselves, taking office buildings and potentially converting them into a multifamily building. It’s not easy to do, and I think you have to have some bones in place … which not every building has. But yeah, I think you’ve going to have to get creative with this stuff.”
Grant Barnhill, founder, Shift Workspaces
Shift is a coworking firm with two locations in central Denver. It opened its third location in Littleton last summer, amidst the pandemic.
“Pre-pandemic, we were at 100 percent in both our Corona and Bannock locations. And we’ve averaged, since April, about 85 percent occupancy on an economic basis. Our Main Street location (in Littleton), which we opened in July, is 50 percent right now. We opened up at about 10 percent.”
“We had a really interesting situation in that we turned over about 70 percent of our rent roll, probably, in the first six months of the pandemic.”
“This year I think it’s going to be a slow return. But once people are vaccinated, I think that a year from now it’s going to look a lot like it did pre-pandemic.”
Doug Wulf, office broker, Cushman & Wakefield
Wulf has represented both tenants and landlords over three decades. He’s currently marketing Block 162, the 30-story office building nearing completion along 15th Street downtown.
“The last thing, when these kids come out of college and high school in five years and one year, that they’re going to want to hear an employer say is, hey, you’re going to work from your apartment the rest of your life. They’re going to want an office environment. They’re social creatures, that’s how they meet people … Beyond 2021, I think the largest thing that comes out of this is we go to four-, four-and-a-half-day workweeks.”
“The challenge right now is tenants have a very difficult time understanding what their long-term space needs are. And new construction largely requires seven-to-10-year minimum leases.”
“The biggest byproduct out of this, as well, is going to be the quest and desire for open-air fresh space — terrace balconies, patios. And it’s not street level. It’s going to be somewhere in the inside of the building where it’s private and secluded and safe. It’s easy to accomplish in the suburbs, but more complicated and expensive downtown.”
Brent Farber, co-founder, Elevation Development Group
Denver-based Elevation’s office development portfolio includes the 260 North building in Cherry Creek and The Hub in RiNo. The firm and Boston-based Beacon Capital Partners are planning an office project at 3100 Brighton Blvd.
“We just finished a project in Cherry Creek, 260 North … We were able to see how the tenants were living in their spaces during the pandemic. Having massive amounts of exterior space in these office spaces has really allowed for these tenants to live differently in their space, and work differently. I think you’ve seen a lot more physical presence in those spaces because of that. People can take meetings outside, people can have lunch outside.”
“Denver is set up well. You see cities like San Francisco, New York, Chicago — they’re struggling. Tenants are looking for a lifestyle, and Denver and Colorado as a whole provide that lifestyle. We’re seeing a lot of businesses relook where their workforce wants to be long-term.”
Without an office, “you do lose culture, you lose lifestyle, and you lose the ability to recruit and create retention for your employees. And those are critical points to businesses having success.”