Denver Office Market Report

Vacancy
         
The Denver Office market ended the second quarter 2008 with a vacancy rate of 13.0 %.  The vacancy rate was 12.8 % at the end of the first quarter 2008, the end of the fourth quarter 2007 and the same at the end of the third quarter 2007. 
The overall vacancy rate in Denver’s central business district at the end of the second quarter 2008 increased to 11.9%, up from 11.6% at the end of the previous quarter. The vacancy rate in the suburban markets increased to 13.2%, up from 13.1% in the previous quarter.

Absorption

          Net absorption for the overall Denver office market was a negative 22,614 square feet in the second quarter 2008.  That compares to a positive 101,267 square feet in the first quarter of the year. 
          Net absorption for Denver’s central business district was a negative 90,411 square feet in the quarter.  For the suburban markets, it was positive 67,797 square feet in the quarter. 

Rental Rates

          The average rental rate for available office space, all classes, was $21.92 per square foot at the end of the second quarter 2008.  This represented a 2.3% increase over the end of the first quarter. 
          The average rental rate in the central business district was $28.54 at the end of the quarter and $20.23 in the suburban markets.

                    Central Business District            $28.54
                    Southeast                              $21.64
                    Southwest                              $18.16
                    West                                     $18.53
                    Aurora                                   $16.19
                    Northwest                              $18.89

Largest Lease Signings

          The largest lease signings in 2008 included:  the 344,572-square-foot lease signed by Xcel Energy at 1800 Larimer St.; the 156,075-square-foot deal signed by Newmont Mining Corporation at Palazzo Verdi in the southeast market; and the 89,253-square-foot leased signed by QIP Holder LLC at 1001 17th St., in the central business district.

INDUSTRIAL MARKET REPORT     

Vacancy

          The Denver industrial market ended the second quarter 2008 with a vacancy rate of 7.8%, compared to 7.6% at the end of the first quarter. 
          Flex projects reported a vacancy rate of 13.9% while warehouse projects reported a vacancy rate of 6.6%, up from 6.4% at the end of the previous quarter.

Rental Rates

          The average asking rental rate for available industrial space was $6.47 per square foot at the end of the second quarter.  This is a 2.5% increase from the end of the first quarter.
          The rate for flex space was $9.90 while warehouse rates stood at $5.41.

Absorption
         
          Net absorption for the overall Denver industrial market was a negative 417,838 square feet during the second quarter.  That compares with a positive 100,898 square feet in the previous quarter.

For more information, please contact Carol High at (303) 628-0888 or carol@chighre.com

Source:  The Costar Office Report

.