Senate Bill 181 was designed to increase regulations of gas and oil drilling operations in Colorado but may impact the real estate market as well. Downtown Denver houses many gas and oil companies. If these companies move or go out of business, the Denver real estate market could face repercussions.
Gas and oil companies will no longer desire Denver real estate
Gas and oil companies lease about 4.5 million of the 37 million square feet of office space in downtown Denver. Although the bill’s tightened regulations may decrease demand for new real estate development from gas and oil companies, downtown Denver houses a variety of companies. The drop in real estate demand from the gas and oil industry is not expected to have a dramatic effect on the overall market conditions.
Some companies may immediately sublease their space
Because of the increased regulations, some gas and oil companies may choose to dramatically downsize. These companies may put growth plans on hold but remain operating in locations already in place. How would the market be affected? People wanting to live in downtown Denver would have more housing options.
The gas and oil companies may either remodel their space to create an attractive environment for tenants or they might do minimal remodeling and create very affordable living options for those willing to make the space work.
Although gas and oil companies occupy nearly 15% of downtown Denver’s office space, Senate Bill 181 is not projected to negatively impact the market conditions.
If you have questions about how your property may be affected, contact O’Brien Legal Services for guidance.