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CBD Posts High Office Absorption

DENVER-Researchers point to expanding tenants and declining unemployment as the precipitating factors behind the Downtown's strong rebound last year, absorbing 863,317 sf in the best showing of all submarkets in 2005.

By John Rebchook | Updated on February 01, 2006

DENVER-The CBD’s office market is continuing its recovery, according to the most recent analysis by the local office of CB Richard Ellis Inc. Last year, the CBD experienced the highest positive absorption of all submarkets in the metro, ending the year with 863,317 sf.

“This positive trend is one of the reasons why 12 buildings have sold, are in negotiations, or are rumored to be sold in the near future,” CBRE researchers conclude. “Institutional investors are willing to pay prices approaching replacement values with cap rates in the 6% to 7% range.” The largest building sale occurred at 633 17th St., which was acquired by Triple Net Properties for $90 million.

According to the report, Colorado continues to outpace the nation in economic growth with the largest employment gains in natural resources and construction. The Economic Policy Institute looked at five business-climate rankings in a recent summary and Colorado was the only state to place in the Top 10 in all categories. Metro Denver’s employment rate has dropped to 4.9%, the lowest since September 2001.

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