The Colorado Front Range is experiencing a tech real estate gold rush.
Between July 2017 and the end of June, tech companies took on 849,000 square feet of new office and commercial space between Fort Collins and Colorado Springs, according to research compiled by real estate firm CBRE. That’s more than double the amount of space tech firms filled in the proceeding 12 months and brings the total tech-dedicated space in the region to 17.3 million square feet.
“Colorado is witnessing tech industry expansion to a degree not yet seen this business cycle,” Katie Murtaugh, a CBRE senior research analyst and author of the company’s Colorado Tech Book 2018 report, said in a statement last week.
The appetite for space was driven by growth of local companies and those already working in the state, but also in-migration, the report found. At least 22 companies either opened new Front Range offices or moved their headquarters to the area during the 12-month study period.
Denver saw the most space sucked up during that span, more than 472,000 square feet. Apple and Facebook were among the companies that moved into their own spaces downtown.
Boulder had the largest single transaction: Google’s move into the first 242,800 square feet of its campus near 30th and Pearl streets. Growth in the Fort Collins market continued to be driven by manufacturing and research and development needs, while software is beginning to take a bigger bite out of Colorado Springs, CBRE found.
AAron Ontiveroz, The Denver Post
Site program manager Jess Abbott walks in front of a window in the cafeteria at the Google campus in Boulder on Wednesday, March 7, 2018. Phase 1, which consists of two, roughly 100,000 square-foot buildings, opened in December. Construction on Phase 2, a third building of roughly 100,000 square feet, should begin later this year and be complete in late 2019.
AAron Ontiveroz, The Denver Post
Product support expert for Google Pay Ada Chinda boulders at the Google campus in Boulder on Wednesday, March 7, 2018. Phase 1, which consists of two, roughly 100,000 square-foot buildings, opened in December. Construction on Phase 2, a third building of roughly 100,000 square feet, should begin later this year and be complete in late 2019.
AAron Ontiveroz, The Denver Post
An employee works in a moody lounge at the Google campus in Boulder on Wednesday, March 7, 2018. Phase 1, which consists of two, roughly 100,000 square-foot buildings, opened in December. Construction on Phase 2, a third building of roughly 100,000 square feet, should begin later this year and be complete in late 2019.
AAron Ontiveroz, The Denver Post
Program manager Ali Beatty works in a hanging workspace at the Google campus in Boulder on Wednesday, March 7, 2018. Phase 1, which consists of two, roughly 100,000 square-foot buildings, opened in December. Construction on Phase 2, a third building of roughly 100,000 square feet, should begin later this year and be complete in late 2019.
AAron Ontiveroz, The Denver Post
Artwork adorns the walls at the Google campus in Boulder on Wednesday, March 7, 2018. Phase 1, which consists of two, roughly 100,000 square-foot buildings, opened in December. Construction on Phase 2, a third building of roughly 100,000 square feet, should begin later this year and be complete in late 2019.
AAron Ontiveroz, The Denver Post
A trailer in a workspace at the Google campus in Boulder on Wednesday, March 7, 2018. Phase 1, which consists of two, roughly 100,000 square-foot buildings, opened in December. Construction on Phase 2, a third building of roughly 100,000 square feet, should begin later this year and be complete in late 2019.
AAron Ontiveroz, The Denver Post
Community operations manager Andy Bravo works as his dog Bruno sits nearby at the Google campus in Boulder on Wednesday, March 7, 2018. Phase 1, which consists of two, roughly 100,000 square-foot buildings, opened in December. Construction on Phase 2, a third building of roughly 100,000 square feet, should begin later this year and be complete in late 2019.
AAron Ontiveroz, The Denver Post
A dog hook at the Google campus in Boulder on Wednesday, March 7, 2018. Phase 1, which consists of two, roughly 100,000 square-foot buildings, opened in December. Construction on Phase 2, a third building of roughly 100,000 square feet, should begin later this year and be complete in late 2019.
AAron Ontiveroz, The Denver Post
An employee plays pinball at the Google campus in Boulder on Wednesday, March 7, 2018. Phase 1, which consists of two, roughly 100,000 square-foot buildings, opened in December. Construction on Phase 2, a third building of roughly 100,000 square feet, should begin later this year and be complete in late 2019.
AAron Ontiveroz, The Denver Post
Scott Green works at a desk at the Google campus in Boulder on Wednesday, March 7, 2018. Phase 1, which consists of two, roughly 100,000 square-foot buildings, opened in December. Construction on Phase 2, a third building of roughly 100,000 square feet, should begin later this year and be complete in late 2019.
AAron Ontiveroz, The Denver Post
A laptop adorned with various Google stickers sits on the floor of the gym at the Google campus in Boulder on Wednesday, March 7, 2018. Phase 1, which consists of two, roughly 100,000 square-foot buildings, opened in December. Construction on Phase 2, a third building of roughly 100,000 square feet, should begin later this year and be complete in late 2019.
AAron Ontiveroz, The Denver Post
A fireplace styled in the fashion of the Colorado C on the state flag is the centerpiece of a workspace at the Google campus in Boulder on Wednesday, March 7, 2018. Phase 1, which consists of two, roughly 100,000 square-foot buildings, opened in December. Construction on Phase 2, a third building of roughly 100,000 square feet, should begin later this year and be complete in late 2019.
AAron Ontiveroz, The Denver Post
Wall decor at the Google campus in Boulder on Wednesday, March 7, 2018. Phase 1, which consists of two, roughly 100,000 square-foot buildings, opened in December. Construction on Phase 2, a third building of roughly 100,000 square feet, should begin later this year and be complete in late 2019.
AAron Ontiveroz, The Denver Post
An employee walks in front of a wall at the Google campus in Boulder on Wednesday, March 7, 2018. Phase 1, which consists of two, roughly 100,000 square-foot buildings, opened in December. Construction on Phase 2, a third building of roughly 100,000 square feet, should begin later this year and be complete in late 2019.
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The bait attracting all the big fish? As Amazon officials noted when announcing their forthcoming Boulder office this week, the Front Range has a mass of tech workers bouncing between startups and established companies. And, CBRE has found those employees and the space needed to house them is still somewhat of a bargain in Colorado compared to other industry hot spots.
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“Five years ago it used to be a company would open a satellite office at Galvanize and put 10 people in there,” said Alex Hammerstein, a senior vice president with CBRE who specializes in tech. “That’s still happening but now those companies are going from 10 to 150 people overnight because managers are seeing lower wages and the availability of workers here.”
When compared to six other tech hubs in the West — San Francisco, Seattle, Phoenix, Salt Lake City, Portland, Ore., and Austin, Texas — CBRE found Denver had the third highest average tech worker wage at $100,751 per year. That trailed well behind San Francisco and Seattle and floated just a few thousand above Austin and Portland. Denver had the third lowest asking office lease rate at $27.66 per square foot. Average apartment rents in Denver remain much lower than in San Francisco and Seattle and comparable to Portland.
“Labor is still coming here,” Hammerstein said. “We will always be relatively less expensive when compared to San Francisco and L.A, and other markets like those, but the question is how long are we going to be able to compete with markets like Phoenix and Salt Lake?”
