Demand Supports Speculative Office Development in Denver

DENVER–Riverside Investment and Development and Convexity Properties are partnering to develop a new 30-story office tower in Downtown Denver. The speculative office project is an example of the strength of the office market there, which has high demand for class-A space.

“There is a significant and growing demand for high-end office space in Denver. Over the past two development cycles, speculative office buildings developed in Denver are approximately 95% leased and have captured a disproportionate share of tenant demand,” James Roupp, managing director at JLL, tells GlobeSt.com. “Our view is that an office project’s success in today’s market will be dictated by its location, design and health-and-wellness features.” Roupp is handling leasing activity at the Riverside-Convexity property, along with Michael Crane, Julie Rhoades and Maddy Stevenson.

Located at 1900 Lawrence, the office tower will total 700,000 square feet. Although the property isn’t expected to even break ground until early next year, the brokerage team is already expecting strong leasing. “There is a shortage of ‘high performance’ office buildings in Denver, and the pandemic has further tempered new supply,” says Roupp. “Even in the face of COVID-19, new construction assets in Denver continue to lease. 1900 Lawrence is targeting forward-thinking companies who believe that the pandemic will be resolved by the time the building delivers in first quarter 2024.”

The tower will support a broad range of users, including technology firms, law firms, financial services firms and corporate tenants. “The genesis of this design, and the core of our thesis, is to help companies attract and retain talent,” says Roupp.

While Roupp notes the growing demand for high-quality space, he also admits that the current vacancy doesn’t reflect strong demand. “Headline numbers are obviously poor, and class-A vacancies are similar to the last economic downturn in the wake of the liquidity crisis of 2008. However, Denver’s CBD micro markets are behaving disparately,” he says. And buildings in LoDo and the West CBD are much healthier than the other CBD micro markets. Couple that with continued in-migration and we believe that demand for high-end office space in the market will quickly outpace supply.”

The tower is located between Denver’s LoDo and Ballpark neighborhoods.