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Research - NOVEMBER 18, 2020

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Denver’s downtown office market fuels activity amid economic uncertainty

by Andrea Zander

The Denver office market continued to feel the impact of the recession brought on by the COVID-19 pandemic, posting negative net absorption of 546,861 square feet in the third quarter 2020 and bringing the year-to-date absorption down to negative 216,212 square feet, according to CBRE.

Class B buildings drove this activity, recording negative net absorption of 544,981 square feet. By contrast, class A buildings saw positive net absorption of 182,417 square feet, due to several sizable occupancies. Total vacancy increased 137 basis points quarter-over-quarter to 15 percent. Sublease availability continued to rise, ending the third quarter 2020 at 4.3 million square feet metrowide. This is a 70.9 percent increase in space for sublease since the onset of the pandemic in first quarter 2020. Despite softening fundamentals, the direct asking lease rate increased $0.21 from the previous quarter to $29.02 per square foot, full service gross (FSG).

Asking rates in class A and B

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