In an innovative move to rejuvenate its flagging city center, Denver is taking bold steps. The city's officials are gearing up to purchase a notable office building currently leased by The Denver Post for a sum of $89.5 million. This proposal, set to be discussed next week in the city's Finance and Governance Committee, aims to infuse new life into the central business district, which has been struggling with high vacancy rates and a lack of interest in unoccupied office spaces.
Located at 101 W. Colfax Ave., the building is envisaged to be filled with government employees, potentially invigorating the area with renewed activity. District 10 Councilmember Chris Hinds, representing the Central Business District, expressed enthusiasm about this real estate acquisition, highlighting Denver's dedication to revitalizing its city center.
This initiative of Denver is part of a broader trend among major cities trying to revitalize their declining downtown areas. Metropolises like New York, Pittsburgh, San Francisco, and Washington, D.C., are employing various strategies to encourage occupancy in downtown offices. These range from urging employers to enforce more rigid in-office policies to revising zoning laws or repurposing empty office buildings for different uses.
In a similar vein, San Francisco's Mayor London Breed has requested the relocation of some government workers to vacant office spaces in the financial district, aiming to attract other potential tenants.
Under Denver's proposed plan, the city would purchase the 101 West Colfax building from American Properties, based in New York. The proposed selling price of $89.5 million is actually lower than its 2006 selling price, reflecting the current challenges in the U.S. office market with falling valuations and high-interest rates.
Denver's downtown plight mirrors that of other major U.S. cities, with office vacancy rates nearing 29%, as per CoStar data. The city's government sector, however, has been a silver lining, showing increased activity in leasing spaces.
Denver's pending decision on the purchase, expected by March 2024, is seen as pivotal in determining the future vibrancy of its downtown area. Councilmember Hinds is optimistic, aiming to shape a downtown area that attracts visitors and residents alike.
Source: CoStar, Katie Burke, MMCG