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DENVER-Richard Kincaid recently made a whirlwind visit to Denver, his first since being named president and CEO of Chicago-based Equity Office Properties, the nation’s largest office real estate investment trust. EOP is the largest office landlord in Denver’s downtown and along the southeast corridor, with a 14-building portfolio covering four million sf. Kincaid was keynote speaker at the Colorado chapter of NAIOP, which was well received.

After that, he met with GlobeSt.com in the Tabor Center, one of the Class-A buildings owned by EOP in downtown. During the conversation with GlobeSt.com he addressed a number of local and national issues, as well as internal changes at EOP.

Although Denver’s office market is the softest it has been in more than a decade, Kincaid is optimistic about its prospects. “I think there is going to be sustainable office space job growth in Denver,” Kincaid told GlobeSt.com. “It has the intellectual capacity and it is a place where people want to live and work. You have a highly educated workforce. It’s easy to get people to relocate to Denver. And the cost of living is less than on either coasts, so it is a good transplant market. There are a lot of good fundamentals in the market. And we really like the downtown. It is really turning into a 24-hour city.”

He thinks Denver will grow faster than the national average, but less than it did in the ’90s. “You had a period in Denver from 1993 to 1998 where cumulative job growth was 38% and across the country on average it was 28%,” he tells GlobeSt.com. “I think what you’re going to see going forward is a percentage point higher. I think even telecom will start to grow in Denver again. After three years of no growth, telecom will start to come out of its slump. Right now, you see more temporary work. You see consulting and things like out-sourcing. But companies are going to start to bring in new people…Part of our thesis is that regardless of short-term situations, there is always going to be a shortfall of talented workers. And more employers are going to go where the employees are and where they want to be. In Colorado, you have good universities, a good quality of life. That’s why I think Denver is going to show up a lot on people’s relocation screens. It’s not hard to get people to move here; it’s hard to get them to move out.”

EOP expects to save as much as $100 million annually through a new program called EOPlus. “We went public in 1997 and we had 32 million sf and now we have about 126 million sf,” Kincaid says. “We needed to stop and really re-think how to optimize our platform we had built.”

He looked at the data and found that EOP wasn’t doing a very good job of retaining tenants, and he was frustrated. “You’d talk to our leasing staff and they’d say we never lose a deal on our price,” Kincaid says. “Well, I said let’s go back and call every customer who has left us since 1999 and find out what they say. And guess what? The data shows that contrary to what our leasing staff was telling us, we were losing a lot of deals over price.”

That’s not a good thing. “In this business, you make trade offs between price and occupancy,” Kincaid explains. “But occupancy rules. Occupancy and retention rules. It’s very quantitative. Lose a tenant? That’s six to eight months of down time. You can’t make it up.”

The new marching orders were to be competitive. But he doesn’t want to be approving deals from the home office. “I push it all down,” Kincaid says. “For the most part, I don’t want anything on my desk. I want as little as possible (at the deal level) to come to Chicago. I want to be as fast and as nimble as any local entrepreneur. But we can also bring the technological infrastructure and the sheer mass in the market that the local guy can’t provide.”

The company also pulled engineers and property managers out of individual buildings and put them all under one roof in centrally located, high-tech call centers. The one for downtown Denver is in Tabor Center. Doing that in Boston cut expenses by 33%, he says.

One unanticipated plus of having all the engineers and other specialists sitting next to each other is that they were able to brainstorm and share “best practices” with each other more than ever before.

But he says EOPlus has been controversial. Many people thought you should have one property manager stationed in each building. “Before I came to Denver, I was in Atlanta, where EOPlus has been in place longer than here,” Kincaid shared with GlobeSt.com. “I asked a property manager there, what his customers think about him not being in their building every day. His answer? “They don’t know that I’m gone. They think I’m still there,” he told Kincaid. “To me, that is the highest compliment,” Kincaid says.

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