Telecommunications giant Verizon is extending its streak of high-profile real estate deals across the United States in the latest sign of a willingness by corporate heavyweights to invest in physical office space.
The New York-based wireless service provider has signed one of the largest office agreements in the Denver area so far this year with the company's decision to renew the lease for its hub in Lone Tree, Colorado. The 50,000-square-foot deal at 10000 Park Meadows will stretch Verizon's term by an additional five years, leasing representative Colliers confirmed, dealing the struggling Denver office market a boost.
Verizon has maintained its satellite hub in the Denver suburb since signing the deal for the Park Meadows Drive building in late 2019. The telecommunications firm occupies more than half of the nearly 80,000-square-foot property that's owned by the locally based Canvas Credit Union.
While it's most known for its vast network of retail outposts across the United States, Verizon over the past year has ramped up investments in its office portfolio.
The company earlier this year inked a roughly 51,500-square-foot deal for a new office near the Miami International Airport, again sealing one of the largest office leases to be signed in the South Florida area so far this year. The space at 5200 Waterford District Drive is slated to house subsidiary TracFone Wireless, which is slated to move in within the next few weeks.
Verizon also signed one of Manhattan's largest office deals in the third quarter last year for its space at 60 Hudson St., adding to the deals it signed in San Francisco; Boca Raton, Florida; San Diego; as well as a handful across multiple properties in the Seattle area, according to CoStar data.
The flurry of recent activity is somewhat of an about-face for the company after its decision in late 2023 to list for sublease its entire space in Lower Manhattan's Essex Crossing development. The effort to offload its 143,000 square feet across multiple floors at 155 Delancey St. appeared to be a response to Verizon's pandemic-era hybrid policy that, similar to other tenants at the time, made it so that many felt they didn't need to maintain as much space.
After an extended period of record-high availability and depressed leasing, however, Verizon has joined other major corporate tenants as the national office market appears to have turned a corner.
Some of the nation's largest owners are reporting an amount of leasing not seen since COVID-19 sent workers home and upended demand for the office sector; new leasing volume in the first three months of the year neared 2019 levels, according to CoStar data. Those figures have provided the sharpest signal yet that the market has fully entered its recovery phase, a position that is only expected to improve as historically low construction levels are slated to limit supply right at the point when tenants such as Verizon are boosting demand.
The telecommunication firm's Lone Tree deal is especially welcome for the Denver office market, which has struggled to regain its post-pandemic footing.
As other major cities across the country slowly reach a leasing turning point, Denver tenants are still offloading more space than they're taking on, driving the regional vacancy rate up to a record-high of about 18%, according to CoStar data. What's more, the deals that are being signed have been significantly smaller than in pre-pandemic years, with recent leases averaging at just 3,200 square feet, a 40% drop compared to a decade ago.