NGKF: Rates for first-class office space top $50 per sf

JLL market update

Rates top $50 per sf in Denver for first time

Denver’s office market ended the year with 631,642 square feet of absorption, and vacancy stands at 14 percent. In the CBD, ask rates in some of the super premium buildings have breached $50 per square foot, a level never before seen in Denver. In Cherry Creek, Class A asking rates rose to $42 per sf, and in the Southeast Suburban submarket, Class A asking rates are $26.50 per sf.

Worth noting:

  • Writer Square was purchased by the Kroenke Group for $96.0 million, or $534/SF. The 179,693-square-foot project was upgraded and repositioned by the seller, Unico.
  • In the NW submarket, Spot Xchange leased 39,000 square feet in the newly-delivered 8181 Arista Place.
  • BP’s Lower 48 announced a lease of 82,000 square feet at Riverview at 1700 Platte, a project under construction in the up-and-coming Platte Street neighborhood. BP will move Lower 48’s headquarters, initially staffed with 200 employees, to Denver in order to be near its significant assets in the Rocky Mountain region

Although full-year absorption for 2016 was the lowest in the current cycle, the Denver office market has enjoyed an impressive seven-year expansion run resulting in a total of 8.4 million square feet of absorption and a 594-basis point plunge in vacancy.

Edited by the Colorado Real Estate Journal staff.