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Interest in leasing office space in downtown Denver picked up last quarter, though not enough to lower the vacancy rate. At 34.9%, the central business district experienced its highest vacancy rate in years, ending 2024 with more than one-third of its office space available — and that was 2.8 percentage points more than in fourth quarter 2023.
But local real estate brokers feel that the market is finally stabilizing. Leasing was up 13.2% last quarter from a year earlier, so tenants will be taking over empty spots later this year. Many employers have settled on their return-to-office policies (“three days a week,” said Lindsay Gilbert, a commercial office broker at CBRE). And there’s an uptick in companies taking on subleases, which is the space with tenants who no longer needed the rooms.
“We saw signs of stabilization in the last quarter, a stabilized vacancy,” Gilbert said. “As we move into 2025, I think people are hopeful and feeling more confident that we economically had a soft landing, which obviously helps the real estate market in terms of companies now feeling a little more confident about making these longer-term office decisions.”
According to CBRE data, downtown Denver had roughly 10 million square feet of office space available at the end of the year. An additional 1.7 million square feet of subleased space was also on the market, down 14.8% from a year ago thanks to tenants like the city of Denver adding another 82,000 square feet to sublease the former Denver Post building.
But while the rising rate may seem ominous, it’s part of a new cycle in commercial real estate. Office space abandoned during the pandemic were placed into the sublease market. As that sublease square footage finds new tenants, or expires and returns to the direct leasing market, that helps the overall market. Back in fourth-quarter 2019, the downtown market had about 1.1 million square feet in available sublease space, along with an office vacancy rate of 14.3%, according to CBRE.
But sublease space follows the trend of office space — the nicer it is (like Class A space), the more desirable for tenants, Gilbert said.
One area with a higher vacancy rate than downtown was the nearby River North market, which ended the year with a 46% vacancy rate. The area is still popular, attracting several law firms recently, and commands the highest rates, at $49.18 per square foot, which is higher than downtown’s $41.71. The high vacancy rates are attributed to recently completed office buildings with a lot of space available.
The Denver suburbs fared better than downtown, with the midtown area that includes Colorado Boulevard at a 18.1% vacancy rate. The Cherry Creek area is still the place to have an office, with vacancy rates at just 8.6%. The overall Denver office market had a total vacancy rate of 24.9%, up 1.7 percentage points from a year earlier that is credited to 1.1 million square feet of newly built — and empty — office buildings.
Corporate tenants spent the year still figuring out how much space they needed, especially if they’d adopted a hybrid-office policy with workers at the office just a few days a week. Some companies downsized, like law firm Davis Graham, which left the Millennium Financial Center in lower downtown for a smaller space in RiNo last month.
But others expanded. Monday.com, a work-software service, moved a few blocks north to 1755 Blake St. in November and more than doubled its square footage to 26,000 square feet for its growing staff of 80. The company chose to stay downtown because it’s a central location with “a lively business community that encourages innovation and collaboration,” Inbal Avital, vice president of global workplace operations, said in an email.
“In-person collaboration is part of monday.com’s foundational values. It has always been important, so we continue investing in it,” Avital said.
Mobile-app developer Ibotta signed the largest new lease downtown in the fourth quarter, at nearly 85,000 square feet. The company, which went public on the stock market in April, is renovating three floors at 16 Market Square, right on the 16th Street Mall.
Ibotta has long had an office downtown, starting with a basement at 18th and Blake more than a decade ago. The move will vacate its current home at 1801 California St. and add about 10,000 square feet, according to the Denver Business Journal. When Ibotta does move in the fall, there will be room for more than 500 employees. The company has a hybrid work policy requiring local employees to be in the office three days a week.
“We’ve come a long way since our humble beginnings in the basement of a LoDo firehouse, and we look forward to continuing to be a part of revitalizing downtown Denver and playing our part in the continued growth of this city that has given us so much,” Bryan Leach, Ibotta’s CEO and founder, said in an email.
Return to work and other challenges
Many office workers just haven’t returned to the city, or at least not five days a week. In a Downtown Denver Partnership economic update in December, the number of office-based employees downtown on weekdays was 62% of what it was in 2019.
Personal safety, a top concern that undermined downtown’s recovery, had a setback last weekend after a man attacked four people on the 16th Street Mall, killing two. Mayor Mike Johnston called the attacks “rare,” and said violent crimes and drug-related offenses have been in decline. City police also beefed up security patrols in the area.
Leach said in a post on LinkedIn that he is still committed to the company’s move this fall and reminded people to keep it in context: Crime is down, 16th Street construction will end soon and businesses in the finished stretch of 16th Street have seen a 35% increase in revenue.
“Random acts of violence are an abomination, but this is *not* representative of the direction Denver is heading when it comes to crime downtown. Let’s spread the word,” Leach wrote.
The 16th Street Mall project, which has interrupted commerce on entire blocks for two years, is expected to be done by “early fall,” according to the city’s project timeline.
Another biggie coming this year is the Downtown Denver Authority, a funding mechanism that will “provide nearly $600 million to support housing, parks and public space and new development,” said Kourtny Garrett, DDP’s president and CEO.
“It’ll really help us think about the challenges in our commercial office market and office vacancy,” Garrett said, such as “building conversions, bringing on new public projects that will catalyze private development and so on. That in itself has generated a tremendous amount of market interest.”
The DDP, which advocates for businesses, has essentially been helping recruit employers, retailers and restaurants. They built a list of “about 220 very significant leads, mostly from Colorado,” she said. “You’ll see some of those leases come to fruition this year.”
Leven Deli in the Golden Triangle is opening a downtown location later this year. Chef Mary Nguyen, who opened Little Finch on the 16th Street Mall in 2023, has two new Olive & Finch restaurants on the way. Attracting new retailers has been more of a challenge, but gift and design store Adorn opened last year at the Workplace Resource building on Market Street.
As workers return to the office and tourists return to the city, data shows downtown office traffic is at least improving. While weekly office check-ins are still down more than one-third from before the pandemic, the numbers are 2% higher than 2023 levels and better than most cities, according to key-card data for 2,600 buildings in 138 cities nationwide.
“I believe it will be a year of building,” Garrett said. “Transition is a fair word but I would also say they’re going to be a lot of really tangible progress milestones that will set the stage, like the May opening of eight of the blocks on 16th Street.”
Related:
➔ Number of pedestrians downtown now at 85% of 2019 levels. Maybe it was the Christmas spirit? The annual holiday Parade of Lights attracted the most downtown visitors in years, according to the December report of the Downtown Denver Partnership.
Speaking of Denver…
Denver Mayor Mike Johnston said Wednesday that the city is close to acquiring the former Park Hill Golf Course, the 155-acre historic space with a conservation easement restricting development since the 1990s. The deal follows years of controversy, starting with the city offering to buy the green space in 2017. But lawsuits ensued and voters rejected ending the easement three times.
The new plan involves a land exchange of 145 acres of city-owned undeveloped property in Adams County for the former golf course, currently owned by Westside Investment Partners. The site will be turned into a “modern, urban park” and include trails, courts, shaded pavilions and performance stages, according to the news release. The land swap needs approval from Denver City Council and Adams County commissioners.
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Other working bits
➔ Colorado AG sues landlord Greystar. While Attorney General Phil Weiser joined the U.S. Justice Department earlier this month to sue landlords who allegedly harmed renters by using algorithmic pricing schemes, Weiser opened the state’s own case against corporate landlord Greystar on Thursday alleging the company, which manages 45,000 units in the state, “used deceptive advertising to lure consumers into applying for rental housing, and then fleecing those tenants out of millions of dollars by charging mandatory, fixed fees not included in the advertised price for an apartment.” >> Read the lawsuit
➔ Labor Peace Act redo? Gov. Polis weighs in. And he did it during The Colorado Sun’s 2025 Legislative preview on Thursday. Democrat lawmakers introduced Senate Bill 5 last week to end the state’s unique Labor Peace Act, which requires 75% of a company’s employees to participate in the vote to unionize. Without that, workers don’t have to join the union or pay dues. A smaller group of workers can still unionize through the regular National Labor Relations Board process, but they have less bite and don’t represent all workers. Unions support dismantling it because it’s an added hurdle in the process to organize. Business groups oppose any change. Polis said, “The middle ground is the Labor Peace Act.” >> Watch
➔ Guild goes global. The Denver-based education company has expanded its upskilling services to Canada, Mexico, India and the United Kingdom. That’s largely due to customers with locations outside the United States, such as long-time client Chipotle, the first to take advantage of offering Guild’s link to higher education as a perk of work to its international employees. According to Chipotle, employees that participated in Guild programs were “six times as likely to advance into manager positions” and find career growth, in a news release.
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