By Barbra Murray, Contributing Editor
Columbia Property Trust Inc. knows how to hold on to a good thing. The REIT recently secured a new commitment from engineering and construction firm CH2M with the signing of a 370,000-square-foot lease renewal at Columbia’s 478,000-square-foot South Jamaica Street office campus in Englewood, Colo.
Sited on 31 acres in Denver’s Southeast Business Corridor, the four-building South Jamaica complex was developed as a build-to-suit for CH2M’s world headquarters over a four-year period ending in 2007. And it was in 2007 when the firm’s relationship commenced with Columbia. That year, Columbia—then known as Wells Real Estate Investment Trust II—acquired the property in a $138.5 million sale-leaseback transaction.
While CH2M is staying put for the long term, it will maintain its headquarters in only three of South Jamaica’s four buildings, which will leave the complex with an occupancy level of just 77.5 percent at the end of the first quarter of 2016. However, instead of being daunted by the prospect of leasing up the remaining square-footage, Columbia is, as the REIT’s president & CEO Nelson Mills said in a prepared statement, “excited about the opportunity.”
Absorption has a little something to do with it. Denver’s Southeast Suburban submarket leads the entire Denver office market in year-to-date absorption, with a total of just over 266,000 square feet, according to a third quarter report by commercial real estate services firm Newmark Grubb Knight Frank, which oversees leasing at South Jamaica. As Columbia’s Darik Afshani, vice president, asset management, told Commercial Property Executive, “Denver’s diverse economy continues to experience strong population and job growth, driving office demand. Companies continue to be attracted to the city for its quality of life and access to a highly educated workforce.”