Office Market a Mixed Bag

First, the good news.

The forecast for the national economy is upbeat, and Denver more and more is mirroring the national economy, Bante says. Locally, speculative office space has fallen to less than 400,000 sf.

Adelphia Communications recently moved its headquarters to Greenwood Village from Coudersport, PA, and Charter Communications of St. Louis, MO, is expanding in the Denver area and looks like it might move its headquarters here.

Also, there has been positive absorption in two markets: 258,979 sf along the northwest corridor and 312,728 sf along the southeast suburban corridor."Activity is picking up," Bante says. "But there's still a lot of tire kicking." However, the market still faces an overall vacancy rate close to 22%, he notes.

And the market suffered from the repercussions of the war in Iraq. Companies in Colorado, as well as across the country, did not expand earlier this year because of the war. Also, corporate scandals provided another reason for companies not to expand, he notes.

Locally, the market could suffer from the pending acquisition of J.D. Edwards by PeopleSoft, he notes. That could mean the loss of jobs, as well as the loss of another corporate headquarters.

Perhaps most importantly, the forecast for job growth is poor. The office market still needs jobs to fill empty space.