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T he disruptions of COVID-19 on the national office mar- ket have been significant, and while Denver has not been spared from the new challenges, the market benefits from some unique traits. Business- friendly policies have made the Mile High City an attractive place for both startups and large tech firms seeking lower rents relative to tech hubs like San Francisco, Seattle and Austin, Texas. Denver also already was a remote work hub prior to 2020, supporting one of the largest pre-pandemic untethered work- forces of any major metro area. As such, Denver ultimately will see less space attrition than some other markets. The arriv- al of companies new to the area together with the expansion of some existing firms should balance out any downsizing of other office-using businesses, allow- ing space absorp- tion trends to move toward pre- pandemic levels in 2022. Diminished speculative con- struction also will help neutralize the long-term effects of remote work. Denver experienced one of the larger increases in office vacancy of any major market in 2020 as firms attempted to capitalize on empty offices, applying negative pressure on rents. Office fundamentals in downtown Denver and adjacent submarkets such as Lower Down- town and Platte River were hit the hardest, with the vast majority of the 4.1 million square feet available for sublease in November located in those submarkets. Suburban office hot spots like the Denver Tech Center, Greenwood Village and Broomfield also have experienced rising vacancy, however less tenant loss and available subleasing space have allowed for slight rent gains. Heading into 2022, many of these negative trends have begun revers- ing toward pre-COVID-19 norms. The amount of space available for sublease has finally contracted after peaking at 4.7 million sf in early 2021. Firms anticipating a return to in-person or hybrid work also have contributed to vacancy beginning to descend in the core as the leasing outlook improves. Leasing activity has returned in the metro area following a pan- demic-era lull. Vacancy rates have reached their peaks and have begun ticking back down, especially in the hardest-hit areas surrounding the INSIDE Office rebounds PAGE 8 Leasing, sublease availability, transactions and investor confidence all strengthen December 2021 PAGE 12 PAGES 19-31 Trends in action Returning tenants should expect to find greener, wellness-focused office buildings Industrial section Articles highlight the growing last-mile facilities footprint and outdoor storage woes Please see Market Update, Page 14 Brian C. Smith, CCIM, SIOR First vice president investments, and director, Healthcare Real Estate and National Office & Industrial divisions, Smith Office Team, Marcus & Millichap Investors refocus as occupancy passes inflection point CoStar Group Leasing activity has returned across the metro area. In Highlands Ranch, Lockheed Martin leased more than 200,000 additional square feet at the 8740 Lucent Blvd. building.