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DENVER-Office tenants along the area’s Southeast Suburban market leased about 700,000 sf in the first quarter, according to the May report from the South Denver Office Team of CB Richard Ellis. The team includes senior vice presidents Sergio Castaneda and John Marold, vice president Mitch Bradley, senior associates Cameron Brown and associate Brett Nathan.

“The first quarter activity is off to a strong start,” according to the report. And it’s not just gross leasing activity. Tenants absorbed 39,283 sf of space. While not a huge amount, it is a turn around from the negative absorption, which has plagued the corridor, the largest office submarket in the metro area.

Another good sign: class C building asking rate rose 64 cents per sf since the fourth quarter. Because landlords have been so willing to cut deals, many tenants were moving out of class C and class B space into A properties. Landlords now say they are passing on some very aggressive deals, especially if the tenants want to sign long leases.

“We believe that the market has turned the corner,” according to the report. But the report notes that tenants are still taking their time and still have plenty of choices. “Activity is strong, [but] the deal cycle is slow for most users. But deals are getting done,” the report notes.

The report shows that engineering and real estate are the two top specific industries leasing space along the corridor so far this year. In the first five months of 2005, those two industries accounted for more than 38% of all the leasing activity, with engineering taking 22.42% and real estate 16.06%. The third largest category was “all others,” which accounted for 13.54% of the leasing activity. No other single industry accounted for double-digit activity. In third place is financial services, at 8.36%, followed by telecommunications, business services, insurance, attorneys,wholesale/retail, mortgage and government.

In April, the CB team completed 10 deals for 121,115 sf. The largest transaction was for General Motors, which took 51,978 sf in the Sykes Building. The smallest transaction was for 1,084 sf at Country Club Park. In the first five months, the CB team completed 51 deals for a total of 344,221 sf.

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