Signs Of Life In Downtown Denver's Office Market With New Leases
Granite Tower owner CP Group announced a leasing milestone on Monday: It has secured 153K SF in new leases at the 600K SF, 31-story building in downtown Denver, since buying the building in 2021 for a reported $203M.
The largest single tenant is PDC Energy, an independent oil and gas company that leased an initial 108K SF last year and has expanded since then. Beyond that, occupancy at Granite Tower has been powered largely by professional services companies — including a digital media firm, a staffing agency and an employee benefits consultant.
CP Group is a Boca Raton, Florida-based real estate investment and management firm that specializes in owner-operator arrangements, and is Florida’s largest office landlord. The company added 45K SF in new leases in 2022.
Granite Tower's occupancy gains are a positive data point for Denver’s otherwise struggling downtown office market, which saw vacancy rates of 27% in Q3, according to a CBRE analysis.
In another sign that professional services companies and business-oriented tech companies are leading the charge back to work downtown, the Patrinely Group announced on Thursday that it had passed 50% occupancy at its Block 162, another 30-story, 600K SF building just blocks from Granite Tower. That news came as Matillion, a tech company focused on data analytics and integration services, signed a 29K SF lease in a deal represented by JLL on the tenant side.
Because Matillion is leaving an existing office in Denver — it leased five floors at WeWork’s Wells Fargo Center location in 2018 — its new lease probably won't do much to lower overall vacancy rates in the downtown office market. But it may represent another blow to the region’s coworking centers, which saw their footprint shrink nearly 9% between 2019 and early 2022, led by WeWork, which pulled out of several leases after a failed attempt at a public offering in 2019.
