Greenwood Village City Council approved plans for a new 12-story office building Monday night, although some members questioned why the developer wants to erect it.
“You’re kind of contrary to where the market is,” Councilwoman Anne Ingebretsen said at one point.
The 325,234-square-foot building will be constructed by Texas-based Granite Properties at 6430 S. Fiddlers Green Circle. It will go up next to the company’s existing five-story, 120,000-square-foot High Pointe Tower building.
Granite purchased the site, including the existing building, in 2015 for $22.2 million.
The company acknowledged that some might find it strange to construct an office building given the rise of remote work and reduced leasing activity in the wake of the pandemic.
“This is not typical,” Granite Managing Director Stephanie Lawrence agreed. “There’s that much uncertainty in office. But the flight to quality is real and … the suburbs are becoming more attractive.”
“Flight to quality” is a common maxim in the office sector that holds that companies that do want office space increasingly want to relocate to the best buildings available. And Granite isn’t the only firm that has bought into it. A 30-story tower is going up in downtown Denver, and multiple buildings are under construction in RiNo and Cherry Creek.
But the flight-to-quality trend suggests negative implications for older office buildings, which Greenwood Village also has. A large vacant building in the southern suburb just sold for the rock-bottom price of $5 million, and the owner of the city’s Triad Office Complex has defaulted on the complex’s loan.
“There’s a flow to quality, but as a result it’s going to cannibalize our buildings in Greenwood Village,” District 2 Councilman Dave Kerber responded.
“It’s a great development today, but the question is, is it going to be a great development in 50 years?” he added later.
Lawrence said Granite will likely spend the next six months looking for a lead tenant before starting to build. After a tenant is secured, she said, construction will take about 21 months.
All council members ultimately voted to approve the development, except for Councilman Tom Stahl, who abstained.
Lawrence said Granite focuses on “high-quality” office space with extensive amenities. The company has four DTC office buildings – Granite Place at Village Center, Plaza Tower One, Regency Plaza and the current High Pointe building – which Lawrence said are all nearly fully leased.
The new building will be constructed east of the existing High Pointe building, on a portion of the lot where a two-story parking structure stands. Lawrence said the city will start by building a new parking structure on the south side of the lot, then demolish the existing one and start on the office space.
Council members deliberated and asked questions for nearly two hours. In addition to questioning general interest in office space, they brought up concerns about parking and traffic.
Between the new parking garage and existing surface parking, the site will have 1,328 spaces to serve the two buildings, plans show. That’s 500 spaces less than Greenwood Village would normally require for such a project, but Granite requested an exception, citing its own studies showing the parking lots at its DTC buildings don’t fill up.
Council members were somewhat wary, however, noting that the majority of DTC office workers drive in.
“How many people can you put into a place and how many cars can you put into a place?” Kerber asked. “We have five more sites that are developable over there. Are we going to use up all the road space? … The number one problem our constituents have in Greenwood Village is traffic and congestion – it’s not crime, it’s not taxes, it’s traffic.”
But Kerber acknowledged that addressing those hypothetical future issues isn’t necessarily Granite’s responsibility, saying the company shouldn’t “be punished for essentially being first.”
Granite is working with Open Studio Architecture, Norris Design, Meta Landscape Architecture, engineering firm Martin/Martin, FHU Engineers and law firm Foster Graham Milstein & Calisher on the project.