Denver’s Office Vacancy Drops Sharply, Prices Remain Low

Denver’s office market started 2026 with some modest improvement in fundamentals but continued pricing pressure, according to Yardi Matrix information. Sales volume amounted to $102 million in the first two months of the year—placing the metro somewhat mid-pack nationally—yet assets traded at one of the lowest average prices among major U.S. metros. The divergence underscores a market where capital is active but focused mostly on value.

On the vacancy side, the rate remained above the national average in February, despite the metro posting the steepest year-over-year vacancy decline among the top 25 U.S. markets. Development stayed moderate and no new office deliveries were recorded in the first two months of the year.

Against the backdrop of high downtown vacancies, Denver moved to streamline office redevelopment through targeted process and zoning changes. In 2025, the city created a centralized permitting office with a 180-day review target, revised how rezonings move through City Hall, and adopted conversion-friendly rules like parking reforms near transit. The Downtown Development Authority also began using gap financing to help office-to-residential transactions pencil out and support the drawdown of older, less competitive office inventory over time.

Denver’s office construction pipeline stays mid-pack

Denver office space had 604,628 square feet, somewhere in the middle among the top U.S. markets. The share out of total stock was on par with the national index, standing at 0.4 percent. When also taking into account the market’s projects in planning stages, this figure rose to 1.3 percent.

Phoenix (432,258 square feet), Atlanta (406,000 square feet) and Charlotte (204,544 square feet) saw less office construction activity, while Dallas (2.4 million square feet) and Austin (976,979 square feet) ranked first and second among peers. As for office completions, no building has come online in the Mile High City during the first two months of the year.

One of the current developments is 250 Clayton, The Broe Group’s 175,000-square-foot project underway in the Cherry Creek neighborhood. The eight-story building, part of a $200 million mixed-use campus, is scheduled to come online in the first half of 2028.

Sales volume builds, prices remain small

Denver’s office investment volume in the first two months of the year clocked in at $102 million. Assets traded for just $55 per square foot on average, one of the lowest figures among the top 25 U.S. markets. Meanwhile, properties in Charlotte ($477 per square foot), Dallas ($288 per square foot) and Atlanta ($211 per square foot) commanded higher prices.

In terms of total sales since the beginning of 2026, the market surpassed only Atlanta ($85 million) and Nashville ($8 million). All the other similar markets ranked higher for investment volumes, Charlotte leading at $322 million.

In January, CP Group acquired Denver Place, an 891,505-square-foot office building within the city’s central business district. LBA Realty sold the 1981-built asset for $47.5 million or about $53 per square foot.

Another property that traded during the same two-month interval was the 112,243-square-foot 400 Inverness in Englewood, Colo. Westside Investment Partners paid some $125 per square foot for the asset. Värde Capital sold it after taking ownership in April 2024, due to a loan default.

Denver’s office vacancy drops sharply, rents edge lower

Denver’s office vacancy rate as of February clocked in at 19.8 percent, above the 17.6 percent national average. Even so, vacancy fell 5.2 percent year-over-year—the largest decline among the top 25 U.S. metros—driven by improvement across suburban submarkets.

Among peer markets, Denver ranked somewhere in the middle for office vacancy. Austin (24.6 percent) and Dallas (21 percent) had higher vacancy rates, while Atlanta (17.9 percent) and Phoenix (17 percent) fared better.

The metro’s average listing rate during the same month was $30.13, down 2.7 percent year-over-year. Compared to its peers, the Mile High City fared better than Phoenix ($29.83) but lagged behind Dallas ($31.98), Atlanta ($36.64) and Austin ($46.37).

In one of the largest leasing deals that closed early 2026, HDR committed to 72,000 square feet at Patrinely Group’s Block 162, an office tower in Denver’s central business district. The global engineering and architecture firm will occupy two-and-a-half floors at the 594,637-square-foot building that came online in 2021. The company will relocate more than 500 employees at 675 15th St. in October.

Flex office footprint remains steady

Denver’s coworking footprint totaled nearly 4.2 million square feet across 261 locations in February, according to CoworkingCafe. Flexible workspace represented 2.4 percent of the metro’s office inventory. Nationally, Miami led by share at 4.2 percent.

By total square footage, Denver landed once again in the middle of the peers’ pack. The Mile High City was ahead of Phoenix (3.4 million square feet), Austin (2 million square feet) and Charlotte (1.8 million square feet) but behind Dallas (6.7 million square feet) and Atlanta (5.6 million square feet).

Regus remained Denver’s largest operator as of February, with 824,119 square feet across 45 locations. Other major providers included WeWork (307,846 square feet), Spaces (179,696 square feet) and Catalyst (170,000 square feet).