Colorado-Real-Estate-Journal_465855

Page 6 — Office & Industrial Quarterly — June 2025 www.crej.com OFFICE — MARKET UPDATE Delivering industry best construction solutions to our clients’ most crucial business objectives. SERVICES Sun offers multiple project delivery methods, including design/build, design assist, design/bid/build. EXPERTISE ADAPTABILITY CREATIVITY sunconstruction.com 303.444.4780 1232 Boston Ave., Longmont, CO 80501 P redictability: “The state of knowing what something is like or when something will happen.” This year has seen daily mixed signals yielding nothing but decline in consumer confidence, a confused stock market, the tar- iff roller coaster and general lack of financial stability. No business works well under the guise of the unknown, and the general reaction when you can’t predict tomorrow, let alone next year, is you put the brakes on. That is the office mar- ket. Not much activity as many companies are sitting, waiting and watching. “Survive until 2025, then back to normal.” What a funny phrase to think of when I really sit down and reflect on how the office market’s theme was in 2022. Many compa- nies survived, but the world has changed how we view office space. The new normal has been set. And what is normal for tech is not nor- mal for wealth management com- panies, nor is it normal for startups or well-established companies. And what is “normal” for the JP Mor- gans of the world is not what is “normal” for Google. All office envi- ronments and policies are not cre- ated equal, and the shift to hybrid for many is here to stay. As a result, office vacancy still is a problem in Boul- der. The hybrid work schedule is in full bloom, so many companies are downsizing, and shorter-term leases are impor- tant to keep the flexibility. What has not changed is the space needs to incorporate newer finishes with amenities, parking, common gathering areas, and an underlying message that health and wellness are impor- tant. Ironically, price is really not an issue if the space checks all the boxes. For instance, downtown Boulder has office space for $1 per square foot triple net – yes $1 per sf triple net per year – that has been sitting for years, and there are $45 triple-net rates that have also been sitting for years. Bad news: Although the number of transac- tions, including some subleases, is going up, the downtown Boulder vacancy rate is still hovering at just over 25%. That is obviously still not a healthy number, but kudos to the Boulder Chamber’s Economic Council for creating committees to help address pillars for getting people back into the office. This includes addressing the unhoused situation and collaborating with the restaurants to create some incentives. Boulder Chamber, in conjunction with local business leaders, is launching the next chapter of Boulder Together, which is a strategic initiative focused on addressing Boulder’s most pressing challenges. This speaks volumes for the business community and for those businesses considering relocating to Boulder: We care. Momentum is also on the upside with new company inquiries sub- stantially higher in 2025 compared to past years. And the inquiries represent a big variety of indus- try types, in particular aerospace, quantum and AI-related groups. There is no denying the talent in this area, and with over 10,000 freshly graduated University of Col- orado students, the pool is strong. Of course, the announcement of Sundance has created quite the buzz; only time can tell how that will impact, if at all, the office envi- ronment. But all stories providing energy and keeping Boulder in the spotlight will help get our “normal” vacancy number back to that com- fortable 10% within the next few years. s Bgamble@deancallan.com Boulder market seeks clarity to improve vacancy Becky Callan Gamble CEO, Dean Callan & Co. Boulder Chamber, in conjunction with local business leaders, is launching the next chapter of Boulder Together, which is a strategic initiative focused on addressing Boulder’s most pressing challenges.