Is Denver’s Slow Office Absorption a Cause for Concern?

Greg Bante

Denver is one of the fastest growing markets in the Western US, but office absorption rates fell in early 2018. According to a new office market report from Savills Studley, office absorption fell in the third quarter of 2018—fueled mostly by trend toward right sizing. Leasing activity was up from 1.9 million square feet to 2 million square feet, and vacancy rates of class-A space trended down 10 basis points to 18.6%. Rental rates, however, increased 2.4% overall and 2.3% for class-A space.

“The beginning of 2018 witnessed a slight slowdown in absorption, but a quarter-over-quarter analysis illustrates it has picked up since Q2,” Greg Bante, executive managing director at Savills Studley, tells GlobeSt.com. “A number of factors contributed to the lag, including tenants’ ongoing commitment to space efficiency and the trend toward densification, as well as the fact that tenants took a little longer to make decisions in Q1.”