MARKET SUMMARY
The Denver office market exhibited encouraging fundamentals in Q2 2021, posting negative direct net absorption of 430,422 sq. ft. This marks the fifth straight quarter of negative absorption, although this figure has vastly improved upon last quarter’s negative 1.1 million sq. ft. absorbed. Class B office properties were the catalyst for this quarter’s change, recording approximately 336,000 sq. ft. of negative net absorption. Total vacancy grew 140 basis points (bps) quarter-over-quarter to 18.8%, prompted by multiple large office properties in Downtown delivering mostly vacant. Sublease available space increased, albeit marginally compared to previous quarters, as occupiers weigh their office requirement needs. Leasing activity continued to improve, posting approximately 1.0 million sq. ft. as Denver office interest persists and competition for space picks up. The average direct asking lease rate continued upward, reaching $30.96 per sq. ft. full service gross (FSG). Construction starts slowed as 1.3 million sq. ft. of office space was under construction during Q2 2021 and only one property broke ground. New office completions were plentiful as eight buildings delivered 1.3 million sq. ft. of new space, including Block 162, McGregor Square and Market Station in the Downtown submarket.
Read the full report here.
