Bottom Seen for Local Office Market

DENVER-The metro office market is near the bottom, but it could take five to seven years before it is at a point of equilibrium, where developers once again are confident to build spec buildings. That’s the word from David Banzhaf, a director and office broker at Cushman & Wakefield’s Denver office.

Banzhaf says the tech wreck, Sept. 11 and tourism issues all are affecting local employment. And without job growth, the office buildings won’t fill, he says.

Banzhaf notes that the Colorado jobless rate is 5.3%, but it is much worse in the high-tech arena, where employment has dropped every month since March 2001. Recent layoffs have occurred at AT&T Broadband, Sun Microsystems, Autoliv, Merrill Lynch and Qwest.

What happens at Qwest, and UAL, also could affect the economy, Banzhaf notes. United Airlines, with 7,800 employees in Colorado, is one of the state’s top employers.

“The layoff cycle is not over yet,” he says.

Meanwhile, tenant concessions are the highest in more than a decade, with landlords offering aggressive deals to keep tenants, he tells GlobeSt.com.

And tenants have plenty to choose from.

There are now 29 buildings along the southeast suburban corridor with more than 50,000 sf of contiguous space available and 10 buildings in the CBD with more than 50,000 sf of contiguous sf.

However, that offers an inviting opportunity for any out-of-state companies that which to relocate or open a regional office in the Denver area, Banzhaf notes.