Why do companies lease commercial space if they don't want it?
No company wants a lease. Space is a cost center, one of the largest on the P&L after payroll, and if a business could hit its revenue, hiring, and margin targets with zero real estate, it would sign that deal today. Companies lease space because it produces something: access to customers, the ability to recruit, a workflow that ships product, a brand that walks clients through the front door. The lease is the tool. The business outcome is the point. A tenant rep engagement should start with the outcome... most start with the square footage.
In 1960s marketing classrooms, Harvard professor Theodore Levitt made one line famous: "People don't want a quarter-inch drill. They want a quarter-inch hole."
Levitt was quoting a hardware distributor named Leo McGinneva, and he gave credit every time he used it. Most people repeating the line don't. Details matter, in citations and in leases.
Here's what the line means for your next real estate decision: you don't want a building. You want what the building does.
Nobody at your company wakes up wanting 20,000 square feet. Your CFO doesn't want a 7-year term. Your COO doesn't want a loading dock. What they want is revenue growth, easier hiring, lower cost per unit shipped, and the option to change their mind when the business changes. Real estate is the drill. Those outcomes are the hole.
That distinction sounds philosophical until you watch it decide who wins and loses in this market.
The trigger is not the reason
When a broker calls you, the first question is almost always some version of "when does your lease expire?"
That's a fine question. It's also a drill question.
A lease expiration is a trigger... a timer that forces a decision by a certain date. So is a loan maturity, a headcount jump, an acquisition, or a compliance problem you can't engineer around in your current building. Triggers create urgency. They tell you when you have to decide.
They tell you nothing about what you should decide. The reason for the decision lives somewhere else entirely:
- Growth. The right trade area, footprint, or market entry to grow revenue.
- Talent and brand. Location, commute, and workplace experience as recruiting and retention tools.
- Efficiency and margin. Less wasted space, better workflow, lower occupancy cost per dollar of output.
- Risk and flexibility. Controlled occupancy cost, expansion and contraction rights, renewal leverage, less landlord dependency.
- Life-cycle and operations. A merger, a succession, a power or zoning constraint that quietly runs the whole search.
A broker who works off the trigger alone will get you a market-rate deal on the space you asked for. Whether it's the space your business needed is a question that never got asked.
The Denver market is proving Levitt's point right now
If space were a commodity, if tenants were buying square footage the way you buy diesel, Denver would be impossible to explain.
Downtown Denver office vacancy hit 38.2% at the end of 2025, per CBRE, with submarkets east of Larimer above 40% and Uptown at 45.3%. Older Class C buildings are sitting around 50% vacant. Meanwhile, Cherry Creek North is running at under 2% vacancy for office and retail, per the Cherry Creek Alliance's latest report.
Same metro. Same economy. A 36-point vacancy spread.
Tenants are not chasing cheap drills. If they were, they'd be filling the discounted space downtown. They're paying premium rents in Cherry Creek and in downtown's newest Class A product because those buildings do something: they pull talent in, they put a brand in front of clients, they make the return-to-office argument winnable. That's a market pricing holes, not drills.
The same logic shows up in how companies are sizing. Downtown sublease availability has fallen from 2.5 million square feet to about 1.2 million, back to pre-pandemic levels, while firms like Ballard Spahr cut their footprint by a third and kept a 60-person team fully functional through hybrid scheduling. Fewer square feet, more outcome per foot. That's not a weak market story. That's occupiers getting sharper about what they're actually paying for.
Five questions your broker should have asked you
Here's a fast diagnostic. Think about your last real estate engagement, or the broker calls you're fielding now. Did anyone ask questions like these?
- What does the business need to look like in year three of this lease? Headcount, revenue, product mix.
- What would this space have to do for hiring to get measurably easier?
- Where do your employees and customers actually come from, and what does the commute or access pattern cost you today?
- What's the cost of being wrong on size, in both directions, and which wrong is more expensive for you?
- If you could run the business with 20% less real estate, what's stopping you?
Now compare that to the questions you probably got: When does your lease expire? How many square feet? What's your budget?
The first list works backward from the hole. The second list sells you a drill. Both produce a signed lease. Only one produces a lease that still fits in year four.
This is also where the economics hide. The gap between face rent and net effective rent (free rent, TI allowances, the concession structure behind the asking number) is real money, and in a market this bifurcated it moves fast. But the concession package is table stakes. The expensive mistakes are strategic: the wrong submarket for your workforce, the wrong footprint for your operating model, a term with no flexibility the year your business changes. A good tenant rep advisor protects you on both. A transactional broker, at best, protects you on the first.
What this means for your next decision
You have leverage in most of this market, and landlords know it. The question is whether that leverage gets spent on rate alone, or on the things that compound: flexibility, fit, and a footprint that serves the business plan instead of constraining it.
Start with the hole. Write down what the business needs the space to do before anyone shows you a floor plan. Then hold every option, every concession, and every broker to that standard.
Frequently Asked Questions
What should a tenant rep broker ask before showing me space in Denver?
Before touring anything, a tenant rep should understand your growth plan, hiring strategy, workforce commute patterns, operating workflow, and flexibility needs, then translate those into location, size, term, and lease structure. If the first questions are only about expiration date and square footage, you're being sold space, not advised.
Why is downtown Denver office vacancy so high while Cherry Creek is nearly full?
Downtown Denver's office vacancy reached 38.2% at the end of 2025 (CBRE), while Cherry Creek North runs under 2%. Tenants are concentrating in buildings and submarkets that help them recruit talent, serve customers, and support in-person culture, and they're paying premiums to do it. They're not chasing the cheapest space. They're buying outcomes.
Is a lease expiration the right time to rethink our whole footprint?
Yes. It's the cheapest moment you'll ever have to fix a strategic mistake. An expiration gives you leverage and optionality that mid-term restructuring doesn't. Start the analysis 12 to 24 months out for most Denver occupiers, longer for large or specialized requirements.
Does hiring a tenant rep cost the tenant anything?
In most Denver transactions, tenant rep fees are paid out of the commission structure the landlord has already budgeted, not as an added cost to you. The real cost question runs the other way: what an unrepresented or under-advised deal leaves on the table in concessions, flexibility, and fit.
The lease is never the goal. It's the tool your business uses to get somewhere, and the tool should be picked to fit the destination, not the other way around. After 25 years of running occupier transactions, the pattern is consistent: companies that start with the business objective outperform companies that start with the space.
If you're working through a lease decision in Denver, whether that's a renewal, a relocation, or a footprint question your CFO is pushing on, I'm happy to run the numbers with you. Schedule a conversation.
About Brian McCririe
Brian McCririe is Executive Managing Director of SVN | Denver Commercial and National Council Chair for Occupier Services across the SVN network. After 25 years representing tenants and investors across global markets, he now focuses on the Denver Metro area helping companies navigate leases, acquisitions, and the gap between what landlords offer and what occupiers deserve. He leads one of the metro's top tenant rep practices and writes about the deals, decisions, and market shifts that matter to corporate real estate leaders.
