Market Statistics

Market Overview

After several years of robust growth, the Denver office market has started to show signs of slowing. Vacancy rates have increased in most submarkets and as a result, rental rates have leveled off.

Like many markets across the country, weakening market conditions can be attributed in part to an increase in sublease space. With over 600 sublease options currently available totaling approximately 5 million square feet, tenants have a litany of space options.

Grubb & Ellis noted that "lease rates have retreated from their highest levels in more than a decade as the market as the market continues to confront its 18.2% vacancy rate.

"Denver's CBD is generally healthy," states Transwestern vice president Peter Coakley, "but the recent addition of approximately 750,000 SF of sublease space has slowed rent growth." Four new Downtown properties are on the drawing board, states Coakley. However, all four projects are "expressly contingent upon reaching some significant level of preleasing..., no one has expressed the desire to go forward on a purely speculative basis."

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