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So far Sarah Cullen has created 63 blog entries.

Tenant Improvement: Construction Considerations

People are headed back to their offices across metro Denver as the effects of the COVID-19 pandemic wane, with many companies re-engineering their strategies around office usage to accommodate changes in employee preferences and business realities.

These changes often necessitate tenant improvements to a new or existing office space, which is an exciting opportunity for business leaders to infuse culture and flow, but in today’s environment can be extra challenging, requiring additional consideration and expert navigation.

Even before COVID-19 sent global commodities markets into a tailspin, construction materials costs were on the rise, thanks to surging demand during a decade-long construction boom in most major U.S. cities, including Denver. The strain on supply chains caused by COVID-19 only exacerbated this problem. Coupled with uneven demand for construction materials that has left some producers unsure about how to manage production levels, many common materials are difficult to come by, or just plain expensive.

Lumber prices, for example, spiked in early May to more than $1,600 per 1,000 board feet before coming back down to $1,285 in the beginning of June, a number still well above the pre-pandemic price of $540. Similarly, paint, millwork and copper wire have shot up in price. Steel costs 60% more than it did a year ago.

Labor shortages remain persistent in construction, particularly for skilled tradespeople, which can often slow timelines and drive up prices as contractors try to lure employees away from competitors. Increased demand for subcontractors has also resulted in short bid hold periods, which further complicates financial forecasting.

On top of all of that, permitting has become increasingly more difficult than it was before the pandemic. Fifteen months of remote work for municipal workers using systems made for in-person permitting created a backlog, and many of these workers are still remote. A pandemic-related surge in homeowners applying for permits to complete small renovations to their properties added to the workload of these systems.

As a result, permitting is taking longer than expected, especially in popular, growing cities like Denver, with some reports of wait times locally stretching as long as 18 weeks. This, in turn, impacts construction schedules and budgets.

a construction site with bulldozer

So, what does all of this mean for companies seeking to complete a tenant improvement project?

Be aware and do your research. While it may be trickier to complete this kind of project than it was 18 months ago, it’s certainly not impossible. With the right assistance and advice, tenants of all stripes can complete a tenant improvement project that makes room for the recalibration of office usage in the post-COVID world.

Tenants should work with experienced, well-connected brokers to negotiate with landlords for higher improvement allowances that will help offset the increased costs of labor and materials and ensure that the process is started far enough in advance. Market dynamics shifted during the pandemic, giving tenants more leverage to make requests like these.

It’s also critical for tenants to make sure they are casting a wide net when working with general contractors, architects and other project partners who are part of the tenant improvement process. By making sure there’s plenty of competition for their business, tenants can find better prices or generally be more selective so they’re getting what they want for their money.

At the same time, business leaders should be prepared to make timely decisions. Prices are expected to continue rising for the foreseeable future, so delaying a construction decision can mean spending thousands more than expected.

With help from an experienced team like ours at Tributary, any company can successfully execute a tenant improvement project to get teams back to work in the most efficient and thoughtful way possible, even in the current challenging climate.

Tenant Improvement: Construction Considerations2021-06-12T15:36:04+00:00

Denver Market Insights from Q1 2021

With the first quarter of 2021 behind us, we now have a clearer view into the impact of the depths of the COVID-19 pandemic on our local commercial real estate market. As expected, the office market has been dealt a couple of setbacks, but if you’ve been considering a new office space, now could be a great time to make your move, with an experienced, knowledgeable brokerage team by your side.

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Denver Market Insights from Q1 20212021-04-23T17:03:46+00:00

Tributary Named DBJ Small Business Award Honoree

When we founded Tributary in 2015, we set out to do things differently. We organized our firm around the philosophy that relationships come first, and have since developed a set of five core values that guide us personally and as a company. We have worked hard to grow our business thoughtfully, intentionally and with dedication to each other and the Denver community.

That’s why we’re so proud to have been named one of the Denver Business Journal’s 2021 Small Business Award honorees. Commitment to community is the theme that runs through each of the Small Business Award honorees this year. According to the DBJ: “These small businesses are not only devoted to their communities — they wouldn’t be finalists in the Small Business Awards if they weren’t — but they’re inherently connected to their communities. They’re a part of something bigger.”

Receiving this honor, which recognizes “excellence and resilience among small businesses, highlighting their contributions to metro Denver’s community” is validation of not only our hard work in building Tributary but also in our decision to build our company with people and values that believe in service and contributing to something greater than ourselves.

Our five core values are simple but powerful:

• Show Up: We are fully present and fully invested. We show up for each other, for our clients and partners, and for our community.

• Advocacy Always: We are strategic advisors who remain focused on our client’s long-term success. We cultivate enduring relationships through our tireless advocacy and expertise.

• Do the Right Thing: We go the extra mile in every interaction. Being successful doesn’t mean anything if it isn’t done with integrity.

• Team Above Self: By working together toward a common vision and leaning into our individual strengths, we win together. Every hiring decision is made as a team to maintain our corporate culture.

• Give Back: We share our success by paying it forward and representing the Tributary values in our communities.

Although we’re guided by five core values, the one that really drives our day-to-day work is “team above self. ” We have all learned, especially this year, that by consistently supporting one another, we’re able to achieve more together than we can individually.

Some of our specific community efforts in 2020 included assembling Thanksgiving baskets for young adults through Bridging the Gap, part of a Mile High United Way program that helps young people transition out of the child welfare system and ramping up individual volunteer efforts in the community in various capacities. Our team members volunteered with organizations like Big Brothers Big Sisters of Colorado, Rocky Mountain Alliance Children’s Foundation and the Denver Foundation.

Because our company culture is so important to us and our success, we worked hard to maintain morale throughout the worst of the pandemic in 2020. Through virtual happy hours and socially distanced activities, like early-morning mountain bike rides, we managed to stay connected and celebrate wins together. We also hosted webinars for team members and clients to interact and discuss issues around the economic fallout of the pandemic.

As we look ahead to the rest of 2021, we’re so excited about continuing to grow our business according to the values that have brought us so far. Congrats to our amazing fellow Small Business Award winners and cheers to navigating this next chapter of doing business in Denver together!

Tributary Named DBJ Small Business Award Honoree2021-03-24T21:27:22+00:00

2021 Office Market Outlook

While market downturns aren’t anything new – many of us have ridden out one or two major ones firsthand – 2020 and the COVID-19 pandemic brought a level of unpredictability that couldn’t have been anticipated. Despite all the unknown, however, our team continues to find opportunities and help clients take advantage of the market.

When business and economic considerations become dependent on how quickly a virus spreads, business-as-usual goes out the window. Rolling stay-at-home orders and business closures have resulted in mass layoffs, and subsequent financial hardships for some companies have led to even further job losses and even companies closing their doors entirely. All of this has naturally had an impact on the commercial real estate industry.

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2021 Office Market Outlook2021-02-15T15:50:06+00:00

A Year Like None Other

It’s safe to say that 2020 has come with unexpected challenges. From the abrupt shift to a virtual office environment to the subsequent shifting of the Denver market, there has been a lot to navigate as a team this year. Our in-person meetings and gatherings might have been few and far between, but thanks to the ongoing drive and fortitude of Team Tributary, we have gotten through it and learned so much together as a team.

We wanted to share a few of the biggest lessons, takeaways, favorite moments and more from navigating this unique time.

Finding the perfect balance of persistence and patience

Pandemic or not, our team has remained committed to pushing forward and delivering quality results for our clients. Working in this kind of industry can be difficult when there are macroeconomic factors at play that are out of our control. However, every day we have made a concerted effort to continue to be an advocate for our clients by providing valuable resources.

Recognizing that our industry knowledge could provide valuable insight for companies across Denver, we launched our Tributary webinar series back in April and have hosted multiple events over the last several months with industry experts covering topics including navigating office leases, reopening your office and looking at the future of the Denver market.

Practicing patience has been a valuable skill in getting through this year as we have all learned to navigate a new normal. It has also been important to remember to slow down, support each other and show empathy in any way possible.

Staying connected as a team in new ways

Ever since the stay-at-home orders required us to work in a virtual environment, we’ve had to pivot the way we operate, interact and communicate as a team. Open and honest communication has been key in making sure our new systems are working and things are continuing to move forward.

Since culture is a huge part of our team at Tributary, it has been important to find ways to continue celebrating monumental milestones this year. Virtual happy hours and socially distant outings – including early morning mountain bike rides – have been a great way to stay connected and maintain a degree of normalcy on our team.

Remaining committed to community involvement

One important way we’ve navigated 2020 is through maintaining steady involvement in our communities, in whatever way we can. Giving back is ingrained in our culture, and this year in particular has shown us the importance of showing up for those in need.

Recently, our team put together Thanksgiving baskets for young adults through Bridging the Gap, part of Mile High United Way’s program that helps young people transition out of the child welfare system with housing and personalized supportive services. These baskets were designed to help provide a sense of comfort and hope during an uncertain time and we’re grateful to have been a part of it.

As the chair of the Catalyst Philanthropy Group within Mile High United Way, Senior Broker Natalie Geer helps plan a monthly virtual volunteering event as well as a professional development event. This year, they partnered with the Women’s Bean Project, a non-profit organization with the mission to change women’s lives by providing stepping stones to self-sufficiency through social enterprise. Together, they hosted a cooking show to share one of their famous chili recipes and raise awareness for additional ways to support the organization.

Senior Broker Jona Behm plans to participate in local food drives as a way to improve the wellbeing of the neighborhoods she cares about.

This year, Tributary has made financial contributions as a team to important causes such as Denver Active 20-30, Rocky Mountain Alliance Children’s Foundation, Social Venture Partners Denver and Big Brothers Big Sisters of America.

While this year has been anything but normal, there is much to be grateful for. We look forward to continuing to serve our clients and our communities through the end of this year and into the next.

A Year Like None Other2020-12-16T18:49:02+00:00

‘Tis the Season to Sublease

As we close out 2020 and look towards a (hopefully) very different 2021, many companies are still unsure about what to do about their office space. One growing trend? Subleasing.

As hundreds of businesses choose to downsize or leave their office spaces entirely due to COVID-19, sublease availability in Denver has jumped to record levels. At the end of Q3 2020, there were 4.3 million square feet of sublease space available, a 28.2% increase quarter over quarter. With total construction volume reaching 3.3 million square feet, and only 9% of the 1.4 million square feet of upcoming speculative office space leased, we are likely to end 2020 with a supply that significantly outweighs demand.

Now is the time to take advantage of the market.

If you’re not ready to sign a traditional lease, subleases provide a unique opportunity to secure quality office space. While each sublease has its own unique set of lease terms, many provide discounted rates or additional perks like fully furnished set-ups. It can be a great option to try out a new location or specific building while assessing more long-term solutions for your company.

With a rollout of vaccinations on the horizon and expectations for a new normal by summer, it’s important to think ahead and secure leasing opportunities while they’re still available.

Interested in learning more? Check out our available subleases on our brokerage page and LinkedIn page or reach out to us at andy@tributaryre.com.

‘Tis the Season to Sublease2020-12-11T17:44:36+00:00

Q3 2020 Denver Office Market Outlook

In a year that has been anything but predictable, it’s safe to say we’ve all been navigating quite a lot. Companies across Colorado have had to face many difficult decisions, including what to do with their current office space. During Tributary’s recent “Denver Office Market Outlook” virtual panel moderated by Partner and Managing Broker Andy Cullen, local industry experts weighed in on the current state of the Denver office market and what’s next for the Mile High City. Below, you’ll find a full recording of the panel as well as some key takeaways. If you have any follow-up questions, please don’t hesitate to reach out to us directly.

Economic Impact of COVID-19 on Denver – Randy Thelen, Vice President of Economic Development, Downtown Denver Partnership

  • Denver has consistently ranked as one of the best-positioned cities to recover from COVID-19 due to multiple pre-pandemic factors including a strong economy.
  • Millennials are continuing to move to Denver at a high rate, even without jobs lined up.
  • Large tech companies are continuing to locate to Denver where there is access to top young talent.
    • One of the most recent companies to announce a move is Palantir, which is relocating to Denver from Silicon Valley.
    • Other-high profile tech companies like Facebook, Amazon, Google and Snowflake also have offices in the Denver metro area.
  • Restaurants and retail are feeling the impact the most:
    • Downtown’s restaurants heavily rely on foot traffic from conventions, events, sports games and more. With many of these events already canceled well into 2021, it will be a challenge for restaurants to attract the same customer base to drive sales.
    • Leaders are looking for ways to drive regional visitors back to the Downtown core with events such as a modified 9News Parade of Lights.
    • Destinations like Larimer Square have helped their businesses adapt to the challenges of the pandemic by closing their streets to traffic and allowing restaurants to expand their patios to allow customers to safely dine outside.

How Denver Office Tenants are Shifting Their Mindset – Amy Aldridge, Partner, Tributary Real Estate

  • Tenant perspectives continue to evolve week by week.
    • Regardless of their circumstance, most companies are trying to reduce costs and operating expenses at some capacity.
    • Many companies are either subleasing their space or looking for subleases while they wait to make a long-term decision on office space.
  • With the expectation that by next July we will be in some type of new normal, tenants should plan ahead and take opportunities while market rates are low.
  • Flexibility is key when it comes to rethinking the office of the future. Many offices are testing out a hybrid work environment where employees can choose whether they want to work virtually or in-person at the office.
  • Companies in large high-rise buildings have been more hesitant to return to the office because of the number of touchpoints for employees between their homes and desks – including traveling in elevators and using common areas with other companies.
  • With slowing activity in Downtown Denver, we are seeing more leasing activity in suburban submarkets. Low-rise buildings with large doors or operable windows are attractive workspaces right now.

Managing Office Decisions at a Culture-Driven Company – Todd Panella, Chief Operating Officer, Zivaro

  • Our company has seen outstanding productivity with remote work that requires solo heads-down concentration. But we still need face-to-face interactions in order to build business partnerships and get our product out in the market.
  • It is important for organizations to look past 2021. Now is the time to invest in a new space and continue building your culture so that you are in a good position when things are back to normal.
  • Being remote for so long has reinforced the need for in-person interaction with coworkers and employees.
  • Many companies are exploring a “free address” workspace, which are spaces without assigned seating. With fewer desks than total employees, this approach helps companies keep a smaller footprint and cut down on unused space.

Supporting Tenants While Fulfilling Obligations to Investors and Lenders – Jon Buerge, Chief Development Officer, Urban Villages

  • There is a great need for adaptability during these uncertain times.
    • Not typically a fast-moving industry, real estate companies have had to quickly make decisions to navigate the challenges of the pandemic. We can no longer lean on the best practices of 2019.
    • COVID-19 has been an accelerator of change, and you see that no more clearly than with retail. We are seeing a wave of entrepreneurs test out new concepts that they wouldn’t normally be able to do. For example, Larimer Square has signed nine short-term leases to small businesses.
  • Flexibility of lease terms is a pivotal way to help struggling tenants.
    • Right now, tenants are typically not willing to sign long-term leases as there is still uncertainty as to how the pandemic will play out.
    • When managing tenant lease terms, a blanket policy won’t work. It is important to fully understand the fundamentals of each tenant’s business so that you can create a customized, individualized strategy to provide the best help and assistance.
  • The importance of partnerships.
    • Keep close contact with tenants, lenders and investors right now – these partners need to be a large part of the dialogue when it comes to decision-making.
    • Developers are seeing a lot of inside flexibility from lenders and investors. Don’t be afraid to ask for what you need.

How Landlords are Thinking About Office Space – Allison Berry, Vice President, CBRE

  • While rental rates are remaining steady, landlords are open to additional tenant concessions like free rent and more TI dollars.
    • Office tour activity has picked up over the past month in downtown Denver.
    • Landlords are continuing to explore ways to incorporate more safety measures into their buildings, including increased air filtration, UV light sanitizers, increased janitorial staff and more.
    • Landlords are taking advantage of lower construction costs to build out spec suites and undertake additional improvement projects in common areas.
  • Tenants should not limit their decisions based solely on COVID. There’s more opportunity to negotiate favorable multi-year leases now than there will be once a vaccine is released.
    • With more than 2 million square feet of sublease space available in Denver, there is increased competition for direct lease opportunities.
  • As larger tech firms sign office leases in Denver, there is an increased interest from smaller tech companies who serve in adjacent support roles.
  • Owners and landlords continue to look for the right ground-floor retail as an amenity for their office tenants.

Final Thoughts – Making Decisions Moving Forward:

  • If your company is able to, now is the time to take advantage of the market. Once there is a vaccine, that opportunity will be lost as activity and rates pick back up.
  • A company should not make a decision strictly based on COVID-19. You could be inhibiting your company’s future growth.
  • Keep in mind that people still want to work in great workspaces. While we can get our work done at home for heads-down work, we are missing that human connection that comes with in-person collaboration.
  • With challenges onboarding new employees and maintaining team culture virtually and the natural transition with leases, there will be a large pent up demand for office space in Denver by Q3 2021.
  • Now is the time for entrepreneurship. Take advantage of the flexibility and unique leasing opportunities that are available in the market right now.
Q3 2020 Denver Office Market Outlook2020-10-29T18:47:44+00:00

Denver Office Market Update Q2 2020

Denver’s commercial real estate market entered Q2 2020 in a strong position, even as COVID-19 forced the majority of the state to shut down starting in mid-March. While Denver’s office landscape is starting to shift as companies re-evaluate their space needs, there is steady activity across the Denver metro area.

Here are some highlights of Denver’s commercial real estate activity in Q2 2020.

 

Downtown Denver

  • The market continues to shift as 58 new subleases have hit the downtown market since April 1.
  • Facebook announced plans to double the size of its office at 1900 16th St.
  • Occidental Petroleum Corp. is looking to sublease six floors totaling 130,068 square feet at 1099 18th St.
  • Dispatch Health raised $136M in Series C funding.
  • A parking lot at 1300 Cherokee St. in the Golden Triangle sold for $6.7 million.

 West Denver

  • Bancroft acquired Union Terrace Building for $11,327,200 or $132.62/sf. The building was 86% leased at the time of the sale.
  • Tap Rock Resources leased 23,000 sf at 523 Park Point Dr. in Genesee.
  • Golden View Classical Academy acquired a 54,396-square-foot building at 601 Corporate Circle for $7,783,400 or $143.09/sf.
  • Next Level Sports Performance acquired a 10,875-square-foot building at 4670 Table Mountain Dr. for $2,325,000 or $213.79/sf.

Northwest Denver

  • Rowdy Mermaid, a kombucha startup in Boulder, raised $3.5M.
  • Crocs opened its new headquarters at ATRIA in Broomfield.
  • Office Evolution, a Louisville-based coworking franchisor, opened its 15thColorado location in Northglenn.

Colorado Blvd/Glendale/Cherry Creek

  • The Citadel building in Cherry Creek sold for $33M.
  • Former Inn at Cherry Creek announced plans to reopen next year as The Clayton.
  • BMC Investments broke ground on a 6-story building in Cherry Creek, anchored by Equinox fitness club.

 Denver Tech Center

  • Vectra Bank submitted plans to build a nine-story HQ within Belleview Station.
  • Boom Supersonic, a startup looking to build commercial supersonic jets, raised $3 million.
  • The landlord of the six-story Tuscany Plaza in Greenwood Village sued Red Robin for unpaid rent.
Denver Office Market Update Q2 20202020-10-07T22:13:35+00:00

Black Lives Matter

We believe that Black Lives Matter. We have been filled with sadness and anger watching the series of disturbing and tragic events that have recently taken place in Black communities across the country – including the deaths of George Floyd, Breonna Taylor and Ahmaud Arbery – and the fact that this has been a reality for far too long.

Systemic racism continues to plague the United States. It is up to all of us to come together, acknowledge the problems and educate ourselves so that we can become part of the solution.

Though we can never completely understand the adversities and fears felt by our Black communities, we are committed to listening and learning during this time. Here are some resources we’ve found helpful as we discuss as a team what actions we want to take as a group as well as individually.

Black-owned businesses and causes to support in Denver:

Informative books to start reading:

  • “White Fragility” by Robin DiAngelo
  • “The New Jim Crow: Mass Incarceration In The Age of Colorblindness” by Michelle Alexander
  • “So You Want to Talk About Race” by Ijeoma Oluo

Podcasts to listen to:

  • “1619” by NYT
  • “The Nod” by Gimlet
  • “Code Switch” by NPR

Documentaries worth watching:

  • “13th” by Ava DuVernay
  • “The Hate U Give” by George Tillman Jr.
  • “When They See Us” by Ava DuVernay

Ways to donate your time and money:

  • Donate to the Denver chapter of Black Lives Matter.
  • Volunteer to help with clean-up efforts in Denver. Signing up for the Downtown Denver Partnership’s newsletter is a good way to stay updated on upcoming opportunities.
  • Donate to these Black-owned businesses, many of which were destroyed during the riots.
  • Helping Hand is a campaign started by Access PR to support Black-owned businesses affected by COVID-19 and recent looting from protests.
  • Support the Black-owned businesses in Minnesota affected by riots and COVID-19.
  • Donate to this list of small businesses and community effort programs that are asking for donations.

These lists are by no means exhaustive, and we know that eradicating racism in all its forms will require persistence and long-term action. Please reach out to us if you have any suggestions for ways we can strengthen our support.

Photo courtesy of photojournalist Chris Hansen, 9News.  

Black Lives Matter2020-06-15T22:22:33+00:00

Re-Opening Your Office Space Recap: Video + Key Takeaways

Re-opening office spaces across Colorado requires thoughtful planning, clear communication and patience for employers, employees and property managers alike. During Tributary’s recent “Re-Opening Your Office Space” virtual panel moderated by Partner Amy Aldridge, local industry experts weighed in on what it looks like for companies to create and implement a successful re-entry plan. (more…)

Re-Opening Your Office Space Recap: Video + Key Takeaways2020-05-15T19:59:38+00:00
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