Denver Office Market Report Q3 2018
Denver's CBD has significant oil exposure, an aspect which was in clear view when the sublet availability rate spiked to the mid-4% range in 2016. Alongside a rebound in oil prices that accelerated during the second half of 2017 and continued this year, the submarket is at its healthiest in years: Moving into the final months of 2018, the vacancy rate was at its lowest in two years at 13.9%.
Following a three year stretch of phenomenal rent gains from 2013-2015, rents fell by about 2% in 2016 and increased by less than 2% in 2017, with rents in the Metro area averaging around $27.81/SF. This follows the metro-wide trend: In Denver, 4 & 5 Star rents posted an average annual increase of less than 1% from 2016 to 2017, while other tiers of office space managed a 4% average annual increase.