Katie Kruger grew up in rural Alaska, in a home heated solely by two wood-burning stoves — but her connection to Colorado came early. She and her siblings took advantage of family ties in Fort Collins to enroll in Colorado State University, and although it looks like a long road from her fine arts degree to her career in commercial real estate, Kruger has always let intuitive choices guide her.
Today, her bond with Colorado is greater than ever — she recently took the helm of five Colorado offices, as market leader and senior managing director of Colorado for CBRE Group. It’s been an interesting path to this new role: she spent nine years as the CEO of the Denver Metropolitan Commercial Association of Realtors, and has also been involved in a range of real estate management tasks, from the design of master planned communities to marketing sustainable energy properties and advertising management of properties.
At CBRE, Kruger joins a company managing 7 billion square feet of properties and facilities globally, with a staff exceeding 100,000. In Colorado, CBRE’s head count is fast approaching 1,000. She oversees all CBRE’s advisory lines of business in the state, including leasing, sales, debt and structured finance, valuation and property management.
She talked to the Business Journal from her Denver offices at CBRE, where her mandate now covers downtown Denver, the Denver Tech Center, Boulder, Fort Collins and Colorado Springs.
So how did a childhood in the Alaska boondocks and a CSU arts education ever bring you to commercial real estate?
My ‘aha moment’ could be tied to the day I skipped my CSU graduation to join friends in a Suburban, driving the dirt roads of the new Stapleton Lowry development. … As I listened to my friends talk of the possible future of the Stapleton property, I realized that looking at big picture issues in properties — an overview that could take sustainability into account — was something that really spoke to me. Almost immediately, I was hooked.
The first position I had in master planning was with Norris Design, where I spent four years fully engaged in oversight aspects of master plans in areas such as water infrastructure. In 2005, I was recruited to join McStain Enterprises as a marketing and promotion manager for green homes. They were way out front in the fully-integrated home, innovating in water heaters and appliances. What made that special was being in the center of developing a brand and a public face for the energy-efficient home. There was already a level of consumer awareness for smart homes, green homes by that time, but there was also plenty to do in raising consumer awareness.
In 2007, I was recruited once again to join a national advertising agency, Strada Advertising, to manage nationwide accounts for planned communities and real estate developers. I spent less than two years as an account executive, but it gave me some good insights into the universality of master plans from region to region, the way that developers interact with government agencies. All of it was quite valuable.
And then it was on to the Denver Metro Commercial Association of Realtors?
Keep in mind it was a gradual thing, in that I started in 2008 and spent almost five years in marketing and communications with the association, before becoming its CEO at the end of 2012. My evolution had a lot of aspects of lucky timing. I was not the leader that I am today when I started out there — and there were many unexpected aspects of the years at the association. In some ways, you could say I started out broad and became narrower in focus over time. For example, in issue campaigns carried out by the association, covering realms such as security and urban corridor planning, there was an organic evolution to spending more time on issues. When I first joined the association, maybe 10 percent of my time was spent on issues. By the time I left, it was close to 90 percent of my time. Just as one example, we were involved in proposals in the state House to modify the SALT [state and local tax] deductions act. It shows how business and policy become harder and harder to separate.
When you came to CBRE, you were well-versed in a variety of sustainability and equity topics, and it sounds as though that was a good fit.
The on-board process was fairly traditional. I met folks at the corporate level and shared my views on a lot of topics. During my time at McStain, I had gotten very interested in monitoring performance of buildings, in particular insuring there was transparency in the process. That fits well with CBRE’s commitment to sustainability in all commercial buildings. CBRE has made a commitment to sustainable workplace temperature, part of the workplace well-being effort. It’s important to add, though, that I am not directly involved in policy at CBRE. It may come up tangentially in the work, but it is not part of what I do, as it was at the association.
I’ve been keen in tracking CBRE’s work with the University of Wisconsin–Madison on women in real estate. It should be no surprise that what women want are the same things that any person would want — respect, recognition for accomplishments. But when the family is brought into the equation, there are also concerns of making the school day match up with the work day, so that women don’t face an extra burden juggling children’s work schedules.
You’ve had many years of working with the Denver metropolitan region, but your focus will expand to the north and south Front Range regions. What do you find interesting about both?
The entire region we call ‘The North’ encompasses both Larimer and Weld counties, and sections of others. The center of the whole region is Centerra [a neighborhood of Loveland between I-25 and Boyd Lake]. You see in places surrounding Loveland and Fort Collins the migration to the work-at-home model, but that expansion comes at a time of industrial surge in the area, too. There’s a model that says residences drive retail, and retail drives industrial, so it’s all interrelated. The new small towns that are the center of growth are the areas where housing is still affordable, like Timnath, Wellington and Johnstown. And both retail and industrial growth will follow in the wake of more residences expanding in these rural locations. We’re already seeing it happen.
In the south, Colorado Springs already has a Downtown boom going on, centered on the sports focus — not just the ‘Olympic City’ portion, but Weidner Field and Robson Arena, too. The vibrant culture that is brought along by the new sports venues gives the impression that the builders looking at large apartment complexes Downtown are not over-promising when they expand the size of projects by another half, or even double the size of the complex. But for Colorado Springs, what is just as interesting as Downtown are the new magnet retail-and-industry developments like Victory Ridge [at Voyager and Interquest parkways]. It seems like every time I visit Victory Ridge, I’m seeing new restaurants and office complexes grow at a pace that might be the fastest in El Paso County.
Now we’ve all heard economists say that in 15 years or so, the greater Colorado Springs region … could well outpace Denver metro, or Denver County at the very least. When you think of areas to the south of Colorado Springs, and possibly extending to Pueblo, that are still in the early stages of development, many could show future trends like that in Victory Ridge, and you realize those predictions are not over-optimistic. The whole south region of the state is just beginning its boom period.
How do you expect commercial real estate trends to be affected by rising interest rates? We hear that 2021 was the year of inflation, where real estate can be a hedge against inflation, but 2022 will be the year of continuous upticks in interest rates.
You can’t make easy predictions because the next year will have a lot of unexpected variables. Typically, a rise in interest rates goes alongside a rise in [capitalization] rates. Now, it looks like we’ll be seeing interest rates go up as cap rates go down. We are sort of entering uncharted territory. But today, it makes sense to move forward, because even if the Fed makes multiple moves to raise interest rates, those rates are still remarkably low by historical standards.