San Diego-based Kleinfelder, a major engine in RTD’s $1.2 billion light-rail line to the airport, on Monday said it will consolidate its metro offices on the 11th floor of CenturyLink Tower in downtown Denver.
About 108 employees will move in June from offices in Golden and Littleton, putting the company’s architecture and engineering hub closer to the financial center of the mountain West and closer to key oil and gas, transportation and water clients.
“It is pretty clear to us that the place to be is downtown right now,” Kleinfelder’s president and CEO Bill Siegel said. “There were a number of drivers. Downtown is the harbor (for the energy sector). Even outside the energy sector, there is a lot of private business being headquartered down there.”
The building’s location in the central business district, bounded on two sides by light-rail lines, also will be a key recruiting tool, Siegel said. “We felt that in many respects we could attract individuals and hire them with a downtown location.”
The deal for 31,385 square feet at 1801 California St. puts the vacancy rate for the 1.3 million square foot skyscraper at about 40 percent, down from 75 percent when the building was acquired by Brookfield Office Properties in December 2011, leasing agent Cushman & Wakefield vice chairman Nick Pavlakovich said.
Since Brookfield bought the tower, it has invested about $58 million remodeling and modernizing the aging 52-story building. In the last 12 months, more than 400,000 square feet has been leased, Pavlakovich said.
He said leasing of 1801 California and other downtown buildings is fueled by companies hoping to lure so-called millennial employees — younger workers who put a premium on easy access between work and home, without a car.
“We’ve seen so much of that in the last four years, where companies want to be in the central business district because it allows them to recruit and retain from all four directions,” Pavlakovich said. “That is exactly what Kleinfelder was thinking.”
The city center has been a steady performer, able to retain and attract companies even during the worst of the recession, said Patty Silverstein, president of Development Research Partners and chief economist for the Metro Denver Economic Development Corp.
She said the office vacancy rate in the central business district is about 10.9 percent, down from a high of 12.9 percent in the third quarter of 2009.
“This is an area that encompasses a little over 200 office buildings with about 30.4 million square feet of rentable space,” she said. “So the decline in vacancy means that we went from 3.8 million square feet vacant in 2009 and now we are down to 3.3 million square feet that are vacant.”
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