How hot is the office leasing market in Cherry Creek? Hot enough that a developer is preparing to knock down a building it completed just 15 years ago.
Denver-based Broe Real Estate Group is currently building an eight-story office building at 200 Clayton St.
It’s the first of two office buildings that BREG plans to develop on the block. In August 2021, when the company broke ground on 200 Clayton, it said the second structure would be built at 250 Clayton St., on the other side of a four-story building the company owns at 216 Clayton St. The firm finished constructing it in 2007.
But BREG — a division of Pat Broe’s The Broe Group — now plans to demolish the 216 Clayton building, so that the 250 Clayton building can be larger than originally planned.
“This is really being driven by the continued office demand we’re seeing in Cherry Creek,” said CEO Doug Wells.
The Cherry Creek office market has been particularly strong coming out of the pandemic. The 200 Clayton building, which will be completed early next year, is fully leased, and the same is true for the office space in other projects nearby. Denver-based oil and gas firm Antero Resources Corp. recently signed on to move its downtown headquarters to an entire building that has yet to break ground.
The 216 Clayton lot is zoned for up to eight stories. That increased since the building was completed, thanks to a citywide rezoning effort in 2010. The remainder of the 250 Clayton development site is zoned for up to five or seven stories, depending on the spot.
By demolishing the 216 Clayton building, BREG will be able to lengthen the planned 250 Clayton building and incorporate more rentable space — about 175,000 square feet versus the 125,000 originally planned, according to the company.
That will mean 250 Clayton will have floorplates as large as 27,000 square feet, an anomaly for the neighborhood.
“Cherry Creek has traditionally been a small tenant and small floorplate market,” Wells said.
The expanded development site also improves the building’s underground parking setup, he said.
BREG expects to complete 200 Clayton in March, and break ground on 250 Clayton in the fourth quarter of next year.
That means the 216 Clayton building is in its final months. The structure has retail space on the first floor, and a residential unit on the top floor that Wells said is used by visiting board members and for entertaining. The second and third floors house office space that is leased to The Broe Group and BREG, which will eventually move into the new 250 Clayton building.
“We’re outgrowing it … and the market is outgrowing it as well,” Wells said.
The Beck Group designed 250 Clayton.