Denver office market report

Q3 2024

Denver's office market is navigating ongoing fluctuations, with a drop in absorption in Q3 after recording strong gains during the previous quarter, However, the office market remains resilient, as evidenced by strong leasing activity totaling 1.7 msf in Q3. While Denver’s office market is facing challenges, it appears to be stabilizing and remains attractive, especially in premium locations like Cherry Creek. Low vacancy rates in one of Denver’s prime office markets, Cherry Creek at 7.1%, suggests a growing preference for high-quality office space in this area, driven by the area’s top-tier amenities, walkability, and location. The balance between fluctuating demand and healthy leasing activity suggests that Denver’s office market is finding a new equilibrium.

1.7 msf

Office leasing activity remains active

The office market remains resilient, with 1.7 million square feet of office space leased in Q3, limited to deals of 20,000 square feet or more. Rather than abandoning office spaces altogether, many companies are optimizing their needs by downsizing or relocating to more efficient spaces that align with current operational demands.

7.1%

Cherry Creek reports lowest vacancy compared to the metro

Cherry Creek, one of Denver's most prestigious neighborhoods, currently leads the city's office market with the lowest vacancy rate at 7.1%. Despite broader market shifts, Cherry Creek remains a highly sought-after destination for office tenants, reflecting its reputation as a vibrant commercial hub and signaling its resilience in a changing economic environment.

$35.70 FS

Asking rents have plateaued

Rental rates have leveled off at $35.70 per square foot, showing an increase of less than a dollar compared to the previous year. Brokers note that the slow growth is partially due to extended negotiations, with deal timelines stretching as tenants take more time to secure favorable terms.

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