Two years of the pandemic have given Colorans new ways to view the urban center, and for commercial real estate brokers, those impressions include an ever-highest office vacancy rate, new security concerns and a visible problem. of homelessness.
But in the details, commercial real estate brokers find plenty to feel excited about where the city is headed.
“This is the toughest time the cities have seen in decades, a generational shift that happened in two years,” Downtown Denver Partnership President and CEO Kourtny Garrett told reporters. brokers gathered Thursday for the Colorado Commercial Real Estate Symposium at the downtown Seawell Ballroom.
But crowds are returning to downtown, including a growing number of office workers who had fled the city following the stay-at-home order.
Garrett, who called the post-pandemic urban scene a “tale of two cities,” said worker participation is most visible Tuesday through Thursday, but also becomes more evident on Friday.
Garrett and other speakers highlighted the $3 billion in new development in and around downtown that took place from 2018 to the height of the COVID-19 pandemic, and a host of infrastructure projects in course to solve big problems. These include a transformation of the Sixteenth Street Mall and Skyline Park, and a 62-acre River Mile project to transform the Platte River between the Pepsi Center and Empower Field.
The shift from working downtown to working from home has exaggerated a high office vacancy rate in the metropolitan area, according to a report reaching around 25% in the central business district this year. But speakers said Colorado’s continued growth and job availability suggest the market is not oversized.
“Is this the end of office space as we know it? I don’t think so,” said Hessam Nadji, president and CEO of California-based Marcus & Millichap, who was a keynote speaker at the symposium.
Office space, he noted, currently has the least optimistic performance of the five core commercial real estate sectors after generally rapid rent increases over the past four years. Rents for offices only increased by 3% over the period, compared to almost 10% for shops, 27% for apartments and 28% for industrial buildings.
For investors in the office sector, the coming years will take a strong stomach, Nadji added, but the demographics look good, including a Gen Z population that has been attacked on the way to marriage and independent living. , likely to return at some point, and workers gradually returning from home.
“It’s certainly gotten busier over the last year, with more people coming in,” said Newmark Group’s Craig Ratterman, who said he now works four days a week downtown at the offices of the business near McGregor Square.
“We love being in there and collaborating,” he added. “You can’t underestimate what you learn.”
The question-and-answer sessions at the largely stockbroker meeting expressed some concerns for downtown safety as the pandemic recedes. But The Partnership’s Garrett says bringing crowds back downtown can help change that perception.
“When you have more people in an area, people automatically feel safer,” Garrett told The Denver Gazette. “You give people more reasons to come back and you naturally have more eyes, ears and activity on the street.”
Garrett added that a change in the perception of security also requires programmatic changes, including greater law enforcement presence, holding those with criminal intent accountable, and assisting those who do. really need.
The Colorado Commercial Real Estate Symposium is presented annually by the Denver Metro Commercial Association of Realtors.