With the announcement Thursday that it will be acquired by CenturyTel, Qwest’s quest for new office space appears to be over.
Denver-based Qwest had been looking for about 400,000 square feet of office space, where it planned to move when the lease on the 1.4-million- square-foot building at 1801 California St. expires in 2012.
Qwest already has relocated many of its headquarters’ 2,500 employees to other offices throughout the metro area, including a building on Mineral west of Broadway in Littleton.
It has subleased about 400,000 square feet in the downtown tower to other tenants and continues to occupy a portion of the remaining 1 million square feet.
Over the past 10 years, the telecommunications giant has shed office space. At one point, it occupied as much as 15 percent of the downtown office market, compared with about 4 percent today, said Tom Lee, senior managing director of Frederick Ross Co.
“If this had happened 10 years ago, it would have affected the real estate market a lot more than it would today,” Lee said. “Now we’re more diversified.”
The downtown market would have been hit whether Qwest was acquired or not because the telecom planned to move many of its employees to other locations, said Bill Mosher, area director and principal of Trammell Crow Co.
“The downtown market was going to get hit either way,” Mosher said. “If there are headquarters jobs leaving, it will hurt downtown and the region.”
The downtown market has about 25.9 million square feet of office space, of which 17 percent is vacant, according to a report by Grubb & Ellis.
If Qwest leaves its headquarters building, it creates an opportunity for other tenants looking for large blocks of space, said Todd Roebken, managing director at Jones Lang LaSalle.
“There is a lot of activity from larger tenants right now,” he said. “That would throw a big block of space on the market that would be pretty attractive.”
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
