{"id":1004767089,"date":"2025-08-12T07:07:53","date_gmt":"2025-08-12T15:07:53","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004767089"},"modified":"2025-08-12T07:07:56","modified_gmt":"2025-08-12T15:07:56","slug":"denver-office-sector-still-sluggish","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/denver-office-sector-still-sluggish\/","title":{"rendered":"Denver Office Sector Still Sluggish"},"content":{"rendered":"\n

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\"The\n\t\t\t\n\t\t\t\t\n\t\t\t<\/svg>\n\t\t<\/button>
Redtail Ridge will include about 2.6 million square feet of mixed-use space at full build-out.
 Image courtesy of Sterling Bay<\/em><\/figcaption><\/figure><\/div>\n\n\n

The Denver office market activity remained on a downward trajectory, according to Yardi Research Data. <\/p>\n\n\n\n

The development pipeline continued to decelerate in the first six months of this year, while vacancy rates climbed steadily since January. The slowdown reflects broader uncertainty and shifting tenant demand, particularly in the downtown area. Moreover, the metro registered one of the lowest sale prices per square foot in the U.S. at the end of June.<\/p>\n\n\n\n

However, the market could see a boost in infrastructure investment through the Vibrant Denver Bond Package initiative expected to go before voters in November. The program would allocate funds toward roads, bridges and pedestrian infrastructure improvements without raising taxes, supporting long-term real estate growth across the metro.<\/p>\n\n\n\n

Denver\u2019s construction activity below U.S. average<\/h2>\n\n\n\n

The Denver office development pipeline encompassed 818,179 square feet in the first half of the year. This accounted for 0.5 percent of its total stock, slightly below the 0.6 percent U.S. threshold. Peer markets with smaller pipelines included Atlanta (707,500 square feet), while Austin (2.7 million square feet), Houston (1.8 million square feet) and Philadelphia (1.2 million square feet) fared better.<\/p>\n\n\n

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The 32-story 17th Street Plaza is LEED Gold-certified.
Image courtesy of Yardi Research Data<\/em><\/figcaption><\/figure><\/div>\n\n\n

Adding planned projects brought the metro\u2019s share out of total stock to 1.7 percent, 50 basis points below the national average. Denver also lagged Atlanta (2.6 percent) and Houston (2.1 percent). Nationally, Austin took the lead with 6.7 percent.<\/p>\n\n\n\n

In March, Sterling Bay and Piper Sandler Special District Group obtained $88 million<\/a> in bonds to start work on a 2.6 million-square-foot mixed-use campus. Dubbed Redtail Ridge, the Boulder County, Colo., project is to include biomanufacturing, R&D, industrial, office and retail space, as well as more than 20 miles of trails across 389 acres. The first buildings are set to come online next year.<\/p>\n\n\n\n

CoorsTek is also working on Building B3, a 181,503-square-foot office development within Clayworks, a mixed-use campus in Golden, Colo. The company took out an $80.2 million construction loan from UMB Bank for the project set to come online next year, according to Yardi Research Data.<\/p>\n\n\n\n

As for office completions<\/a>, only three properties totaling less than 65,000 square feet have come online during the first six months of the year. This marks a 77.1 percent year-over-year decline.<\/p>\n\n\n\n

Denver office assets trade for half the U.S. price<\/h2>\n\n\n\n

Denver\u2019s office investment volume<\/a> year-to-date as of June clocked in at $425 million, Yardi Research Data shows. Among peer markets, Houston ($1.2 billion) and Atlanta ($884 million) topped the ranking, while Austin ($278 million) and Philadelphia ($202 million) were at the opposite pole.<\/p>\n\n\n

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\"Exterior\n\t\t\t\n\t\t\t\t\n\t\t\t<\/svg>\n\t\t<\/button>
Originally built as a school in 1942, Rampart Medical Campus comprises two three-story buildings.
Image courtesy of Echo Real Estate Capital
<\/em><\/figcaption><\/figure><\/div>\n\n\n

Assets in the metro sold for $95 per square foot on average, almost half the $189 national value. Philadelphia sales averaged $89 per square foot, but higher prices were recorded in Houston ($109 per square foot) and Austin ($221 per square foot).<\/p>\n\n\n\n

One of the deals that closed so far this year involved Rampart Medical Campus<\/a>, a two-building, 71,000-square-foot property in Denver. Echo Real Estate Capital Inc.\u00a0purchased the medical outpatient complex from Healthcare Realty Trust for $8.6 million\u2014more than $121 per square foot.<\/p>\n\n\n\n

In February, Lone Star Funds acquired 17th Street Plaza, a 695,221-square-foot high-rise, for $132.5 million. Equity Commonwealth sold the 32-story asset.<\/p>\n\n\n\n

Office vacancy rate climbs year-over-year<\/h2>\n\n\n\n

Denver\u2019s office vacancy rate was 23.5 percent at the end of H1, well above the 19.4 percent national average. Year-over-year, the market saw a 140-basis-point increase in availability.<\/p>\n\n\n

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\"Exterior\n\t\t\t\n\t\t\t\t\n\t\t\t<\/svg>\n\t\t<\/button>
Built in 1975 and renovated in 2000, Colorado Tower I is set to be converted into a residential building.
Image courtesy of Yardi Research Data<\/em><\/figcaption><\/figure><\/div>\n\n\n

When compared to similar metros, Denver fared worse than Phoenix (17.1 percent), Dallas (23.2 percent) and Houston (20.6 percent). Austin (28 percent) registered the highest vacancy rate nationally, followed by San Francisco (27.7 percent).<\/p>\n\n\n\n

Meanwhile, the listing rate was $30.7, below the $32.9 national figure and on par with peer metros such as Dallas ($31.4) and Philadelphia ($31). New Jersey ($33.8) and Austin ($45.3) posted higher rates.<\/p>\n\n\n\n

Hoping to help the housing market and reduce the office vacancies, some investors turn to office-to-residential conversions. In April, the Luzzatto Co. purchased Colorado Tower I and II, two downtown buildings totaling 973,000 square feet, and announced plans to redevelop them into 700 apartments. The high-rises have Conversion Feasibility Index scores of 84 and 88, respectively.<\/p>\n\n\n\n

Coworking inventory remains steady<\/h2>\n\n\n\n

Denver\u2019s coworking footprint<\/a> at the end of June amounted to 3.7 million square feet across 232 locations, according to CoworkingCafe. This accounted for 2.2 percent of its total leasable office space, just above the 2 percent national threshold. Peer markets such as Dallas-Fort Worth (1.7 percent), Houston (1.7 percent) and Philadelphia (1.5 percent) had less shared space available, while Atlanta (2.3 percent) surpassed the metro.<\/p>\n\n\n\n

Regus remained the largest flex office provider in Denver, with 39 coworking locations totaling 728,232 square feet. WeWork (307,846 square feet), Spaces (179,696 square feet) and Office Evolution (155,916 square feet) followed.<\/p>\n","protected":false},"excerpt":{"rendered":"

The market\u2019s development pipeline and sale prices lag national figures, according to Yardi Research Data.<\/p>\n","protected":false},"author":3355,"featured_media":1004727152,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1587,21782,22251,21783,52420,21742,21747,15],"tags":[51047],"class_list":["post-1004767089","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-denver","category-development","category-in-focus","category-investment","category-market-updates","category-latest","category-office","category-west","tag-marketupdate"],"acf":[],"yoast_head":"\nDenver Office Sector Still Sluggish - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"Denver's office development pipeline and average sale prices lagged behind national figures, according to Yardi Research Data.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/denver-office-sector-still-sluggish\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Denver Office Sector Still Sluggish\" \/>\n<meta property=\"og:description\" content=\"Denver's office development pipeline and average sale prices lagged behind national figures, according to Yardi Research Data.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/denver-office-sector-still-sluggish\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2025-08-12T15:07:53+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-08-12T15:07:56+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/08\/Redtail-Ridge-featured.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"803\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Vicentiu Fusea\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/denver-office-sector-still-sluggish\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/denver-office-sector-still-sluggish\/\",\"name\":\"Denver Office Sector Still Sluggish - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/denver-office-sector-still-sluggish\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/denver-office-sector-still-sluggish\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/08\/Redtail-Ridge-featured.jpg\",\"datePublished\":\"2025-08-12T15:07:53+00:00\",\"dateModified\":\"2025-08-12T15:07:56+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/6f90c90d1e85956f06679ddabc844412\"},\"description\":\"Denver's office development pipeline and average sale prices lagged behind national figures, according to Yardi Research Data.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/denver-office-sector-still-sluggish\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/denver-office-sector-still-sluggish\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/denver-office-sector-still-sluggish\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/08\/Redtail-Ridge-featured.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/08\/Redtail-Ridge-featured.jpg\",\"width\":803,\"height\":620,\"caption\":\"The Redtail Ridge Innovation Campus will include about 2.5 million square feet of space. 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