CBRE has just released its Q1 2025 office figures for metro Denver. The office market continued to face headwinds in Q1 2025 as evidenced by negative total net absorption of 813,000 sq. ft. This marks a considerable decline from the previous quarter’s total of negative 36,000 sq. ft. and sits only slightly below 2024’s total of negative 891,000 sq. ft. Total vacancy increased slightly to 26.8%, while sublease availability continued its downward trend, decreasing 11.3% year-over-year to 5.0 million sq. ft. Leasing activity totaled 1.2 million sq. ft., a 16.0% decrease quarter-over-quarter but a 6.6% increase year-over-year, with the government & non-profits sector leading the way.
Investment activity in the Denver metro declined after experiencing an uptick in Q4 2024, recording three transactions and a sales volume of $153.3 million compared to 19 transactions and a sales volume of $277.4 million in Q4 2024. As we progress through 2025, more office building owners in metro Denver are facing the risk of loan defaults and potential foreclosures due to financial pressures. While leasing fundamentals are expected to gradually improve, owners of distressed assets with low occupancy and limited capacity for improvements will face significant challenges. The market is likely to experience more negative absorption, albeit at a
slower pace, as some occupiers are still reassessing their space needs, which typically includes taking less space but in higher quality buildings.
Denver Office Figures Q1 2025
- Total vacancy increased slightly to 26.8%, while sublease availability continued its downward trend, decreasing 11.3% year-over-year to 5.0 million sq. ft.
- Leasing activity totaled 1.2 million sq. ft., a 16.0% decrease quarter-over-quarter but a 6.6% increase year-over-year, with the government & non-profits sector leading the way.
- Investment activity in the Denver metro declined after experiencing an uptick in Q4 2024, recording three transactions and a sales volume of $153.3 million compared to 19 transactions and a sales volume of $277.4 million in Q4 2024.
- In Q1 2025, the metro Denver office market saw a drop in space under construction, which fell 10.7% quarter-over-quarter to 544,000 sq. ft.
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