(To read more on the net lease market, click here.)

DENVER-The Denver-area office market is beginning to attract national attention as a "value" play by investors, and is poised for significant leasing improvements in the coming year, according to the most recent Grubb & Ellis take on the local market. Tenants in the market, or whose leases are nearing expiration, can expect to see both asking and effective rental rates rise, according to Grubb. The report notes that new owners of buildings, who paid extremely low cap rates, will be pushing for rents to hit their pro forma costs.

"The increase in effective rates will be greater than that of asking rates, as concessions continue to decline," the Grubb report notes. That will cause the spread between class A and class B rates to increase, as well the spread between class B and class C space, although at a much slower pace, the report notes. There is still a great deal of vacant flex space on the market, which often is classified as class C space.

"The northwest, Downtown and southeast submarkets are leading the charge," the report states. In 2005, more than 80% of all of the absorption occurred in these three submarkets, Grubb points out. The report notes that smaller markets, with fewer class A alternatives, may suffer in the short-term, as companies seek quality space before rates rise significantly.