Denver Industrial Real Estate and Office Space Market Report
2015 4rd Quarter

The Denver Office market experienced another quarter of positive absorption with a net gain in the fourth quarter. Oil & Gas companies continue to have a negative impact on the areas absorption activity. Despite predictions that falling oil prices would not affect the downtown office market, more sublease space is being added to the market available inventory. While rents are not dropping they are becoming more stabilized. The office submarket in the south metro market had the highest level of leasing activity with downtown Denver having the second highest absorption activity.

In the industrial market, existing inventory up to 40,000 square feet just does not exist thus many larger tenants are opting for of build to suit construction. Increased costs for materials, land, and labor are keeping speculative construction low. Asking rental rates are up 20% and landlords offer very few concessions. Less credit worthy tenants have been pushed out of the market due to the higher rents and a higher quality of larger tenants. Landlords are beginning to turn away automotive and marijuana uses.

*Average Rental Rates:  Office
(Per Square Foot per year Full Service)

CBD               $31.56 NNN
DTC               $29.17 NNN
West              $21.38 NNN
Boulder           $31.65 NNN

*Average Rental Rates:  Industrial Flex
(Per Square Foot per year Triple Net)

Boulder           $11.15
Central            $ 8.16
Southeast        $ 9.42
West               $ 9.81