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Office Market Expected To Weather Recession

DENVER-"This is a cake walk compared to the '80s," Cushman & Wakefield top office broker Nick Pavlakovich tells GlobeSt.com. His base of reference includes the auction of 56-story Republic Plaza for $0.10 per sf.

By John Rebchook | Updated on December 11, 2001

DENVER-Although Denver-area office vacancies are at a 10-year high, while the northwest submarket, sporting a vacancy rate as high as 40%, the market will emerge from the current national recession faster and easier then it did following the energy crash of the mid-1980s. That’s the consensus of Nick Pavlakovich, senior director and top office broker at the Denver office of Cushman & Wakefield.

”You have to look at other cycles, to understand where we’ve gone over the last 18 years,” Pavlakovich tells GlobeSt.com. “To understand where you are today, you have to look at the past, present and future. Not only from a statistical standpoint, but from an environment and emotional perspective.”

He notes that in 1986, President Reagan froze Libyan assets; there was an accident at the nuclear reactor at Chernoboyl; the national unemployment rate was 7.2% and Penn State won the college football championship. In Denver, energy was still king, accounting for 42% of Downtown’s tenancy and 20% of the southeast suburban office space. The S&Ls were giving money away, and their poor lending practicesresulted in them being taken over the government’s Resolution Trust Corp.

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