(To read more on the net lease market, click here.)
DENVER-The Denver-area office market absorbed 426,952 sf in the third quarter, according to a recent Frederick Ross Co. report. And the overall vacancy rate inched downward to 20.03%, compared with the mid-year level of 20.36%.
This is a huge recovery from 2001, when the market showed negative absorption of four million sf. And the quarterly trend is consistent with a steady improvement of fundamentals during the past three years, according to Frederick Ross, one of the oldest and largest locally owned, full-service commercial real estate firms in Denver.
The Denver-area office market is on pace for two million sf of positive absorption this year, "one sign of a healthy market," states the report. "Class A offices continued to pace the market, accounting for nearly 75% of the absorption for the quarter. Year-to-date, 85% of market-wide absorption, according to the report."
The report notes that the CBD has a relatively flat quarter, with the vacancy rate ending at 17.05%, up slightly from the mid-year vacancy rate of 16.81%. Downtown suffered from negative absorption of slightly more than 57,000 sf in the quarter.
The Southeast corridor, by contrast, absorbed slightly more than 132,000 sf in the third quarter, although its vacancy rate also notched up slightly to 22.53% from 22.48% in the second quarter. "New office supply largely coming online vacant contributed to the slight increase in vacancy," Frederick Ross explains. "Signs remain positive for the submarket, as more than 723,000 sf of positive absorption has occurred year-to-date."
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