Denver’s office market continues to display signs of recovery, with noticeable improvements both quarter-over-quarter and year-over-year. Citywide, rental rates are rising while inventory continues to decrease, with four of Denver’s six submarkets having recorded lower vacancy rates compared to both last quarter and the same time last year.
Though both Downtown Denver and the Denver Tech Center are seeing higher vacancy rates than neighboring submarkets, continued development in both areas – 1.86 million square feet of office space currently under construction – indicates strong demand.
While total building sales volume decreased from last quarter, four of the six submarkets showed year-over-year increases (only the Northwest Corridor and the Denver Tech Center did not experience a positive annual trend) indicating strong continued demand and investment activity in the Denver Metro Area.
Over the next six months, we expect Denver’s office market to continue to stabilize, and rental rates to continue to increase, albeit less drastically than previous quarters. The Cherry Creek submarket, in particular, will likely hold its competitive position in the market, continuing to boast the lowest vacancy rates and strongest investment of all our six submarkets.
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