ENERGY: Cornerstone of Denver’s central business district
(Editor’s note: This content is sponsored by Coloradans for Responsible Energy Development (CRED).
Denver is a recognized hot spot among the nation’s emerging energy hubs, according to oil and gas authority Rigzone, which ranked it the third-best city in the world for oil and gas industry careers last year. So it came as little surprise that a conference hosted by commercial real estate giant Jones Lang LaSalle (JLL) downtown in mid-September titled “How Energy Fuels Colorado’s Commercial Real Estate Market” drew a packed house of industry leaders, commercial real estate brokers and professional-service firms in accounting, law, engineering, construction and other industries that stand to gain from the region’s energy boom.
“Denver really stands out as a bastion of opportunity for the next five to seven years, and a lot of that is because of oil and gas,” said John Sikaitis, national research director for JLL, who noted that opportunity has already arrived for some, as the city has seen 49 consecutive months of year-over-year employment increases.
The state’s 52,372 active oil and gas wells – 41 percent of those in Weld County – are only part of the reason for Sikaitis’ Mile High City bullishness. “Denver is the largest city within a 600-mile radius,” he pointed out, adding that the city boasts an enviable pool of educated talent and is practically unrivaled as a magnet for millennials.
The region’s thriving oil and gas industry has notably benefited downtown Denver commercial real estate, JLL research shows. Consider:
• Energy tenants make up 25 percent of the office market in Denver’s top-tier central business district.
• Energy tenants make up 9 percent of tenants in the market overall.
• The number of energy jobs in Denver has increased 27.5 percent since 2007
JLL’s 2014 North American Energy Outlook touted Denver as a location few cities can match: It not only has the ability to both retain senior management and attract new talent, it is in close proximity to higher education programs and research centers. The city has access to research collected by a broad group of federal and private research facilities and public policy programs formed to encourage industry growth.
“We anticipate robust employment growth over the long term, making energy firms an attractive target for commercial real estate developers and investors here in Denver,” JLL concluded in its Denver office report.
On a cautionary note, the report listed “scrutiny toward statewide regulatory referenda centered on fracking” as a concern for both tenants and landlords going forward.
The importance of the energy sector – particularly oil and gas – is something the Downtown Denver Partnership seeks to impress upon the public and has commissioned a study by Denver-based Economic Planning Systems to quantify the industry’s impact on downtown Denver’s economy. The results are due out in November.
“We act as the economic development arm for the center city, so it’s incredibly important from a business attraction and retention standpoint for oil and gas companies that are here, and then also for any future oil and gas companies that we may be looking to attract to the center city,” said Brittany Morris Saunders, vice president, public affairs, for the Downtown Denver Partnership. “We know this is a critical industry to not only our existing economy but also our future in terms of a target industry for downtown Denver and metro Denver as well. Various groups have produced research in regard to oil and gas; some have a looked at the center city, but most are regional, so we felt it was really important for us to tell this story. The study itself will look at the number of employees that are within this industry, both direct and indirect. It’ll also look at the leasable space and leased-out space currently to oil and gas companies, both direct and indirect.”