A local real estate company is offering a helping hand to Denver-area energy companies battered by months of low oil and natural gas prices.

A local real estate company is offering a helping hand to Denver-area energy companies battered by months of low oil and natural gas prices.

Boxer Property on Wednesday announced it is offering free office space in one of its Clock Tower Square buildings in Aurora to an oil and gas company based in Denver that has at least 10 employees.

The company must submit an application and negotiate the details of the lease agreement, but the offer of free space stands until oil prices reach $60 per barrel.

U.S. oil prices, which were above $100 per barrel in the summer of 2014, have been under $60 per barrel since July. Prices have ranged from $43 to $50 per barrel in the last month.

Analysts at IHS Inc., the Douglas County-based information and consulting company, have said they think U.S. oil prices will average in the mid-$40s this year, and don’t see the average getting above $50 per barrel in 2016.

Zachary Segal with August Investors, one of the Clock Tower’s owners, said he hopes the offer of free office space will save jobs.

“Given the current state of the market, our feeling is that these companies will be looking to save wherever they can, and we thought why not save on office rent if it means you can save some jobs elsewhere — that’s the genesis of our running this promotion,” he said.

“If times remain tough, the company that we ultimately select to receive some free office won’t have to pay anything — and if it gets better, then they’d be paying the same low rates that we offer to anyone,” Segal said.

Companies can apply for up to 6,000 rentable square feet (RSF) of space in one of the seven three-story buildings that make up the Clock Tower Square at 14201-14291 E. 4th Ave., Aurora, CO, 80011. The complex is near I-225 and 6th Avenue, and about 1 mile from the VA Hospital currently under construction. It’s also adjacent to a future I-225 light rail station.

The buildings have about 124,000 square feet, and are about 75 percent occupied — up from a 50 percent occupancy rate when the owner ship group including August Investors, bought the property, Segal said.

Base rent in the buildings ranges from $13 to $15 per square foot per year, with the tenant responsible for phone, cable and Internet costs, Segal said.

Aurora and downtown have roughly similar vacancy rates, but tenants sign leases for space in downtown faster than in Aurora — and pay more than twice as much, according to data from CBRE Group Inc., a commercial real estate services firm.

In the third quarter, vacancy rates in Aurora stood at 14 percent, with net absorption of 5,192 square feet and average lease rates of $15.52 per square foot.

By contrast, downtown Denver had a vacancy rate of 13.3 percent in the third quarter, with 32,235 square feet of absorption and an average rent of $34.44 per square foot, according to CBRE.

“We’re looking for an established business who has ongoing costs and wants to get creative — this is one way to do it,” he said.

Details of the lease would be negotiated.

But Segal isn’t too worried about an extended downturn in oil prices.

“If prices stay where they are, we lose the opportunity cost that we’d get by renting to someone else, but if things get better then we’d have a good-paying tenant — and if things go well, maybe they’ll expand with us,” Segal said.

As for the specter of bankruptcy that looms over small energy companies under intense financial pressure due to the low commodity prices, Segal said that’s just a part of business.

“That’s a part of our daily life in the real estate business. It can happen with any tenant,” he said.

“Our goal is to help someone avoid that fate … to find someone who could benefit from this space and enter into a lease agreement with them as soon as possible.”

Applications will be reviewed as they are received.

DBJ real estate reporter Molly Armbrister contributed to this story.

Originally published: http://www.bizjournals.com/denver/blog/earth_to_power/2015/11/real-estate-firm-offers-rent-free-officespace-to.html