If they're right, that would be a 60% increase from today's average rate of about $25 per sf, which already is the highest average rate in more than 15 years, Worrell says. The $40 figure would not be typical, but for isolated cases for outstanding offices, he notes. But even that may be overly optimistic, he says, calling it a "pretty lofty goal."
Worrell says there are at least seven office buildings on the drawing board--ranging in size from about 200,000 sf to close to one million sf--which would dramatically increase the supply. Although all of the office towers won't be built, several of them will come on line during the next two years or so, he says. "There's probably room for one big one and several small ones," he says.
Although not as hot, the suburban southeast corridor is strong. Unlike the CBD, the southeast corridor is seeing its vacancies creep up and its lease rates stabilizing, he says.
The southeast office market contains 23.2 million sf in comparison to Downtown's 23 million sf. "It's an interesting fact that for the first time, essentially in Denver's history, that there is more inventory along the southeast than in the CBD," says Worrell.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
