Denver's Cautious Climb Brings Demand Shift

DENVER—The Denver region’s overall availability rate, 16.2%, inched up by 0.3 pp for the fourth quarter but fell by 1.4 pp for the year, according to a recent report from Savills Studley. Following a significant decline in the third quarter, the class A rate dropped again in Q4, albeit modestly (-0.1 pp to 16.4%). It decreased by 2.4 pp year-on-year. And while the Central Business District and the LoDo district have a limited supply of available class A, that availability did not decline as quickly as it did in some suburban markets, Savills notes.

LoDo only has about 300,000 sf of Class A space available for lease, not including approximately 750,000 sf under construction that will be delivered in 2016 or later. As the availability of space in the CBD and LoDo dwindled in 2014, leasing activity spread to suburban submarkets that offer a larger pool of big blocks, causing availability in suburban Denver to dip markedly.