Denver continues to show signs of recovery, holding its position as the fifth most preferred market in the U.S. for real estate development. Vacancy rates in the Denver Metro Area are decreasing, with each of our submarkets outside of Downtown Denver (West, Northwest, Glendale, Cherry Creek, and Denver Tech Center) exhibiting lower vacancy rates compared to the first quarter of 2022.
Despite high vacancy rates and high office space inventory, office development downtown continues to move forward, with 553,000 square feet currently under construction. Leaders point to the market’s proven resiliency and positioning for future growth. Prior to the pandemic, for example, downtown experienced a decade of employment growth, averaging a 3% increase annually since 2011.
We continue to see migration and attraction to rapidly growing submarkets like Cherry Creek and the Denver Tech Center, which are seeing an increase in office development compared to last quarter.
In each of our submarkets, except for the Denver Tech Center, rental rates rose compared to last quarter, reflecting the increased demand for office space.
Similarly, the Denver Metro Area as a whole continues to see strong demand and investment activity, with four of our six submarkets (Downtown Denver, West, Glendale, and Cherry Creek) exhibiting an increase in building sales volume compared to last quarter.
Over the next six months, we expect Denver’s office market to continue to stabilize, and rental rates to continue increasing. Our advice? Solidify your company’s return-to-office strategy now to help ensure you find a space that meets your needs and fits your budget.
We have the resources to help. Contact us and we’ll help you find your dream space.