Colorado’s growing high-tech scene is currently driving the office leasing activities in metro Denver. According to CBRE’s Colorado Tech Book 2016, high-tech companies leased 1.1 million square feet of office space, or 16.5% of the total leased space, in metro Denver last year, making it the largest industry represented in the market. Overall, technology firms are leasing approximately 9.8 million square feet in metro Denver and 15.5 million square feet in Colorado.
Denver’s high-tech industry is largely (and perhaps surprisingly) diversified. The CBRE report identifies various tech subsectors that are playing a role in the Denver market, including hardware, software, business services, cloud, search, e-commerce, media and entertainment, gaming and social media. Some of the expanding technology companies that have relocated to Greater Downtown Denver in the last year are Healthgrades, Ibotta, ReadyTalk and SendGrid.
Although a majority of the high-tech footprint is still made up of traditional office space, many technology firms have gravitated towards alternative leasing options, such co-working, brick & timber and converted industrial space. The availability of co-working space has increased to over 742,000 square feet, mostly in the LoDo/CPV and RiNo submarkets of Greater Downtown Denver. WeWork, a shared-office company valued at $15 billion, opened two Denver locations earlier this year, one near Union Station in LoDo and the second in Lower Highland. According to a Bloomberg News article, the new generation of co-working spaces not only appeals to freelancers and small start-ups that need the flexibility of month-to-month leasing, but also to established technology firms that are seeking new ways to boost innovation, establish a sense of community and recruit new talent.
CBRE cites various factors for Colorado’s continued growth as a hub for high-tech companies, particularly the state’s relatively affordable cost of living, highly educated workforce and strong network of existing technology firms. The advancement of an increasing number of technology companies will cement Colorado’s prominence in the technology sector, which in turn will positively impact the commercial real estate market.