Colorado Real Estate Journal - March 18, 2015
Downtown Denver currently has a total of 35 million square feet of existing office space. The direct vacancy rate is almost at a record low of 9.7% and net absorption as of fourth quarter of 2014 was 247,184 square feet. With vacancy rates dropping, the market is responding not only with increasing lease rates of $31.16 sf from $24.35 in 2012, but also by constructing additional office space. A total of 2.3 million square feet of new space is currently under construction, planned or proposed throughout Downtown Denver. The strengthening office market fundamentals are also resulting in additional investments in commercial real estate in the Central Business District. Over the past 12 months there have been a total of 8 office buildings sold representing a total of over 1.9 million square feet and a sales volume of over $557 million. Currently there is a strong concentration of new development in the area surrounding the historic Denver Union Station (DUS). The newest office projects to be built in Downtown Denver are the north and south wing buildings flanking the historic station building. They are the 5 story, 102,000 square feet IMA headquarters and One Union Station, another 5 story, 110,000 square feet project. Additional projects currently under construction or planned in the DUS area include 1601 Wewatta, a 10 story, 300,000 square feet building, The Triangle Building, an 11 eleven story, 200,000 square feet office tower, Union Tower West, the 100,000 square foot office space component of a mixed use project, and 16 Wewatta, a 5 story, 50,000 square foot building. With almost all of the DUS parcels under various phases of construction, developers are beginning to look for other opportunities for investment. There are additional projects planned or under construction in other parts of Downtown including 1401 Lawrence, a 22 story, 310,000 square foot tower, Z Block, a 6 story, 260,000 square foot project and one of the tallest office towers to be built in Downtown in 20 years, 1144 Fifteenth St, a 40 story, 640,000 square foot tower that will break ground in spring of this year.