Denver Office Market Report Q3 2020
Denver has reclaimed about half of the jobs lost during April shutdowns, according to June data from the Bureau of Labor Statistics. The nonfarm unemployment rate compressed below 10%, outperforming the national average. At the start of 2020, Denver's unemployment rate was below 3%, making it one of the tightest job markets in the country.
Oil price volatility has already forced a number of drillers to shut their wells. When prices last plummeted below $30 per barrel in 2016, Denver felt the impact, but Downtown Denver received the brunt of the effects. The second quarter was Denver's worst quarterly performance for absorption in more than a decade, and the third quarter could be even worse.
Denver's above-average concentration of office-using jobs appears to have softened the blow to the local economy, as many office employees have the capability to work from home. At the same time, many of Denver's oil and gas companies occupy large blocks of office space in the CBD, which could lead to more volatility in the office market.
Denver, and greater Colorado as a whole, was one of the biggest winners of the last expansion due to its robust workforce, quality of living, and relatively lower cost of doing business. Tech growth has made the difference for Denver's office market over the past decade, and this sector will be a harbinger of the future.