Downtown Office Market to Trump Suburbs

The prediction calls for a 15.6% office vacancy rate in Downtown, versus a 19.2% vacancy rate for the suburbs. As far as Downtown, Denver would be right in the middle of the projections for 10 top markets. Atlanta, Chicago, Dallas, Houston and Los Angeles are projected to have higher vacancy rates, while New York City, Philadelphia, San Francisco and Washington, DC are expected to have lower vacancy rates than Denver in 2007.

Only two cities, Dallas and San Francisco, at 23.5% and 20.6%, respectively, are anticipated to have higher vacancy rates than the Denver-area suburbs, according to the report. However, for a currentsnapshot of the market, the Southeast suburban corridor, is showing more leasing momentum and absorption than the Central Business District, notes Bill Lucas of Jones Lang LaSalle's Denver office.

"Companies in the Southeast are expanding," Lucas tells GlobeSt.com. "They are having some good leasing velocity and positive absorption in the second quarter in the second quarter."

The report puts Downtown's vacancy rate, including sublease space, at 17.59%, almost flat from the 17.10% in the second quarter of 2003, but up from 16.15% in the second quarter of 2002. The suburban market's office vacancy rate, including sublease space, is 21.27%, flat from a year earlier at 21.02%, but down from the 23.81% in 2002, according to Jones Lang LaSalle.