Denver Office Market
4Q22
| Median Asking Rent (Price/SF) | $30.96 |
| Vacancy Rate (%) | 23.64% |
| Net Absorption (SF) | -430,477 |
Although 2021 marked a slow climb back towards normality and ended with optimism going into 2022, hopes for a more robust restart of market activity only lasted the first quarter of 2022, as concerns about the pandemic were replaced with looming questions about the economy and its persistent inflation. The new uncertainly spurred bifurcation in multiple aspects of the market, with smaller suites, high-quality space and small tenants seeing the bulk of activity in the market throughout the year. Many large companies began to plan for a possible recession, either by placing their search for new space on hold or embracing a work-from-home model and putting space on the sublease market. This trend created a historic amount of available sublease space. Smaller, more nimble companies were able to be less cautious, snatching up premium, short-term, plug-and-play space, which provides the highest level of flexibility. Tenant sectors that highly value collaboration and have only embraced hybrid work-from-home models on a limited basis, such as law and engineering firms, were the most consistently active, favoring new construction with high-quality amenities in a bid to attract workers back to the office and attract new talent. New construction and certain submarkets are still attracting high interest, especially in the Cherry Creek and LoDo/CPV micromarkets.
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Denver Industrial Market
4Q22
| Median Asking Rent (Price/SF) | $10.52 |
| Vacancy Rate (%) | 7.2% |
| Net Absorption (SF) | 1,380,055 |
2022 was a fantastic year for the Denver industrial market as annual absorption attained 5.0 million square feet for just the second time in the last 10 years. The East submarket posted the highest annual absorption with 2.9 million square feet and had the largest move-in of the year: Paliot occupied 210,195 square feet at 3700 North Windsor Drive in the third quarter of 2022. In second place was the Southeast submarket with 1.1 million square feet of annual absorption. At negative 978,898 square feet, the Northeast submarket was the only submarket with annual absorption in negative territory, mostly due to a single large move-out in the third quarter of 2022. All other submarkets recorded annual absorption over 200,000 square feet.
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