Denver Southeast Office Figures Q1 2025

A combination of rising vacancy, ample negative net absorption and a slight decline in leasing activity marked another quarter of weakened tenant demand. The total vacancy rate saw an increase of 60 bps (basis points) in the first quarter and 100 bps year-over-year to reach 26.0%.

Q1 2025 recorded negative net absorption of 270,000 sq. ft. a significant decline from the previous quarter’s positive 17,000 sq. ft. Sublease availability in the Southeast submarket eased for the first time since Q1 2024 after declining 155,000 sq. ft. to a total of 1.7 million sq. ft. Leasing activity decreased 8.6% quarter-over-quarter and was down 26.0% year-over-year.

The average direct asking rent rose slightly quarter-over-quarter from $28.90 to $29.25 per sq. ft. FSG. Year-over-year, the average asking rent was up 1.7%. No new office projects broke ground in the first quarter of 2025, with this trend likely to continue through the rest of the year given the market’s still weakened fundamentals and elevated capital costs. With leasing fundamentals yet to see sustained improvement and economic headwinds ever-present, the market continues to face a prolonged period to recovery.