Denver office market report
Q1 2024
The Denver office market began the year with consistent leasing activity, with 1.3 million square feet (msf) of space transacted, driven by a notable demand for smaller lease spaces. Although Q1 saw negative absorption, ongoing leasing and substantial move-ins are helping to stabilize absorption levels. However, availability and vacancy rates are expected to rise due to 3.6 msf of space currently under development, coupled with tenants reassessing their future space requirements and, in certain instances, rightsizing their footprints.
Smaller lease space still leading in demand
As 2024 began, office occupiers continued their preference for smaller spaces, with 64% of all signed leases falling within the 5,000 to 10,000 square foot range. This trend highlights the ongoing shift towards right-sizing.
Negative absorption countered by large move ins
Despite negative net absorption quarter-over-quarter, large move-ins from Bet 365 and Novo Nordisk (totaling 160,000 sq ft) helped mitigate some of the occupancy decline.
Time to lease decreases year-over-year
The average time it takes to lease office space has dropped significantly since its peak of 15.0 months in 2022, now standing at 11.6 months. This sharp decline suggests that transactions are occurring more swiftly, indicating an increased efficiency or demand within the leasing market.
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