The southeast corridor has been especially hard hit with a vacancy rate of 9.24%, compared with 6.78% a year ago, a 36.28% rise. And it will soon hit 12.3% when some soon-to-be-vacated space is added to the 577,650 sf of sublease space along the 28.7-million sf southeast corridor.
The 22.4-million sf downtown market boasts only a 6.2% vacancy rate in direct available space. But there is slightly more than a million square feet of sublease space downtown, which effectively doubles the percent of space available by tenants to 12.3%.
For the overall 93.5-million sf market, which CB breaks into 14 submarkets-a total of 11.7 million sf is available by factoring in sublease space and that which will be vacated in the near term.
Sergio Castaneda, a top broker at CB Richard Ellis, says he thinks the market will continue to be soft for the next 12 months, as corporate America struggles to get its footing back. But he doesn't think the market will hit the depths in did in the mid-1980s. At the end of 1990, the overall office market had suffered from a 23.48% vacancy as the market has started its recovery from the energy bust of the mid-1980s that had left Denver with the nation's highest office vacancy.
Steve Mulhern, of CMD Realty, says the latest report isn't all bad news. He notes the market has shown overall net absorption of 644,112 sf. And the sublease space provides opportunities for tenants to lease on a short-term basis, some of which couldn't have leased space at all a year ago when the market was hot.
John Shaw, of Opus Northwest, however, warns that he thinks the amount of sublease space in the CBD and the southeast corridor could double in the next three months or so.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- 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
*May exclude premium content© 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.
