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DENVER-The metro area’s Southeast office market, led by class-A space, performed well during the second quarter, according to the latest report by the CB Richard Ellis South Denver office team of Mitch Bradley, Sergio Castaneda, John Marold, Brett Nathan and Brian Kunkel. The market, the largest office sub-area in the region, absorbed 399,646 sf in the second quarter and 122,175 sf for the entire year.

“As expected, the majority of the absorption, approximately 92%, was in class-A properties,” the report notes. “Specifically, the Denver Tech Center, of which 75% is class-A product, dominated the absorption with 163,354 sf absorbed during the second quarter.”

The brokers say they believe the year will end with positive absorption along the corridor. Lease rates have leveled off with almost no change since the first quarter, the brokers note. The average asking rate for class-A space is $18.31 per sf, $15.03 per sf for class-B space, and $12.94 per sf for class-C space. The blended, overall lease rate is $16.07 per sf.

“Lease rates will stay flat in class-A properties and decline in class-B and class-C properties,” the report predicts. “Landlords still need to focus on retaining existing tenants as the battle for new tenants remains difficult.”

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