Oil prices have recently started to recover since hitting record lows; although there is still uncertainty as to whether the recent uptick in pricing can be sustained.
In fact, the New York Times recently published an article entitled, “Oil Prices Explained: Signs of a Modest Revival” that explains the impacts and benefits of the latest drop in energy prices. The article asks “when are oil prices likely to recover?” – the article ends by hesitatingly and vaguely responding “in the next year or two.”
The New York Times article also puts forth a piece of startling information – that an estimated 250,000 oil workers (roughly half in the United States) have lost their jobs.
Despite the recent increase in oil prices, however, another area is starting to feel the pinch of the downturn in the oil and gas industry – Denver’s office real estate market.
A recent article in the Denver Business Journal entitled “Oil and gas woes finally catching up to Denver office market,” reported that in the first quarter of 2016, the Denver office market had negative absorption of 349,535 square feet (absorption rates are said to refer to the net amount of space that was either taken off or put on the market in a given time period).
“Trouble in the oil and gas sector” was cited as a “big part of the negative absorption.”
We have previously discussed the real life impacts and the human toll associated with deflated oil and gas prices – the Denver office market is starting to be another ancillary casualty.