New Office Construction Dawns in Broomfield
Construction of new office buildings is not as common as it once was along the Front Range, but a new project in Broomfield is defying that trend. KUNC’s Erin O’Toole talks with Boulder County Business Report publisher Chris Wood to discuss the project and why developers think they see an opportunity.
O’Toole: Chris, the commercial real estate market hasn’t exactly been booming in recent years. Now we have a large new project in Broomfield. What can you tell us about this development and why it’s significant?
Wood:What we’re talking about, Erin, is a new, 186,000-square-foot, Class A office building that is planned for the Interlocken business park along U.S. Highway 36. Broomfield’s Interlocken park continues a build-out that began more than two decades ago. This particular project is known as Eos and will be built by Hines, a development company based in Houston.
Eos is significant for a number of reasons, including that it will be a spec building. That’s real estate jargon for a project that is built on speculation that it will be filled. In other words, it’s not being built with any particular user in mind.
O’Toole: Building such a large project on spec would appear to be a risky venture. Why is Hines taking such a risk?
Wood:Obviously, Hines would not be building this project if it were not very confident that it would be a success. One thing the developers are looking at is the success of another project, Central Park Tower, which was completed in Interlocken in 2010. Central Park Tower encompasses almost 300,000 square feet and is now 70 percent occupied.
Additionally, Interlocken tends to get a lot of the overflow from Boulder, where there is a shortage of Class A office space. So when companies outgrow Boulder’s available office space, they tend to look elsewhere, including Interlocken. That very thing happened with Webroot Software and Sybase, both of which moved their Boulder operations to Central Park Tower last year, taking about 300 employees with them.
Finally, vacancy rates for office buildings with large floor plates are extremely low along the U.S. 36 corridor. Don Dunshee, interim chief executive of the Broomfield Economic Development Corporation, told us that right now, someone wanting a large floor plate in the corridor really has just one building to look at currently, and that’s Central Park Tower.
O’Toole: So there appears to be demand for new office space, but what’s driving that demand?
Wood:Believe it or not, it’s the economy. I recently wrote a column about the latest GDP numbers for local metropolitan areas — GDP refers to gross domestic product. Broomfield is part of the Denver-Aurora-Boulder metropolitan statistical area, and growth there was a pretty modest 1.3 percent last year. But just up the road, Boulder posted GDP growth of 4 percent. That was tops in Colorado and ahead of the national average.
And much of that growth was from the information sector, which includes companies in the software and data sectors – companies like Webroot and Sybase.
O’Toole: So, getting back to Eos -- will the project include anything other than office space?
Wood:Eventually, yes. Hines has purchased two adjoining lots totaling 12.2 acres, and the Eos building will be the first in a multibuilding campus that eventually will include more office buildings, retail space, apartments and a hotel.
I should point out that Eos will be a green-oriented project. It will be LEED Gold precertified, with many energy-efficient features. We’re talking about 10-foot floor-to-ceiling windows to enhance lighting and solar panels that will provide up to 10 percent of the building’s power. Additionally, it will have 18 charging stations for electric vehicles.
Now, I do have a question for you, Erin. Any idea what the name Eos means?
O’Toole: Uh... not really, no.
Wood: Well, I looked it up, and Eos was actually the Greek goddess of the dawn. I guess that sounded better as a building name than the Hesperides, which were the Greek goddesses of the sunset.
O’Toole: Business news – AND a Greek mythology refresher…. Chris, thank you!