Denver Office Market Report Q1 2020
The COVID-19 pandemic is having an unprecedented impact on the national and local economies. Colorado jobless claims have surged by more than 230,000 since mid-March as stay-at-home orders force non-essential businesses to shutter across the state. The health of commercial real estate and the economy virtually hinges on the mitigation efforts to slow the spread of the virus.
Denver County has one of the nation's highest concentrations of jobs in the oil and gas industry, and after oil plummeted to $20/barrel in March, widespread layoffs could be around the corner. Several energy companies already announced significant layoffs prior to the recent plunge in oil prices, including Whiting Petroleum, Occidental Petroleum, and Extraction Oil and Gas. Many of Denver's energy firms lease office space in the CBD, and during the last oil shock in 2016, the submarket suffered rent losses as vacancies shot up by 300 basis points.
Despite the chaos induced by the coronavirus, in mid March, the Colorado Economic Development Commission offered economic incentives to two companies considering an expansion in Denver. One of the companies is a San Francisco-based tech startup. Combined, both firms could potentially add roughly 600 high-paying positions to the local economy.