Denver Office Market Capitalizing on High Quality of Life and Lower Costs Says Savills Studley
DENVER – Savills Studley has released its 2018 Q2 Denver edition of the Savills Studley Office Market Report, an in-depth compilation of office leasing statistics and trends, major transactions, submarket comparisons, employment data, and investment and development activity.
“Sensing an opportunity, Denver tech firms with support from state agencies are intensifying their efforts to lure talent and innovative firms to the region. A high quality of life and lower costs relative to California continue to appeal to some companies,” says Corporate Managing Director Brendan Fisher.
Denver’s technology sector continues to benefit from the nationwide expansion of many of California’s tech companies. Colorado agencies and local tech leaders are collaborating on an effort to maintain or possibly increase the flow of California firms to the region. “Pivot to Colorado” is a $500,000 campaign from state development agencies and several local tech companies to recruit tech talent in Colorado.
Highlights of the report include:
LEASING FALLS AGAIN: Quarterly leasing volume fell for the second quarter in a row, decreasing from 2.2 million square feet (msf) to 1.9 msf. For the first time in several years, no leases over 100,000 square feet were completed. Tenants have leased 9.3 msf in the four most recent quarters, on track with the long-term market average.
AVAILABILITY RATES SHOW LITTLE CHANGE: The market’s overall availability rate fell by 10 basis points to 18.8% this quarter. In contrast, The Class A availability rate fell by 80 basis points to 19.7%.
RENTAL RATE INCREASES: Overall asking rent inched up by 0.4% from $27.44 to $27.54 this quarter and has jumped by 3.4% year-on-year. The Class A average rent increased by 2.7% to $31.20 this quarter but has increased by 2.4% year-on-year.
SALES UP: Office property sales during the last six months (through May 2018) totaled $1.9 billion, a 215% increase compared to the previous six–month total of $616 million.
See the full report here.