Metro Denver’s commercial real estate market inched toward recovery in the third quarter, with vacancy rates for all three market segments – office, industrial and retail dropping slightly, according to CB Richard Ellis.

Third-quarter highlights from the report include:

  • Six straight quarters of positive absorption for the industrial market.
  • New build-to-suit construction for the office market, with Hines breaking ground on a 186,000 square foot office facility at the Interlocken Business Park in Broomfield.
  • The july opening of furniture retail giant Ikea’s 415,000 square foot store in Centennial, boosting the retal market’s positive absorption for the quarter to 568,000 square feet.
  • The vacancy rate for metro Denver’s office market stood at 15.3 percent, which is down from the second quarter’s 15.4. Through the first three quarters of 2011, leasing activity is markedly elevated from the levels recorded in 2009 and 2010 the report states. The average lease rate stood at $19.64 per square foot for the third quarter, up from $19.59 in the second.
  • The industrial market appears to be poised to recover the quickest, with a vacancy rate of 6.9 percent – down from 7.1  in the second quarter – and the sixth straight quarter of positive absorption. But average lease rates haven’t gone up, holding at $5.92 per square foot for the quarter, down 1 cent from the second quarter.
  • While average lease rates fell yet again, from $16.28 per square foot in the second quarter to $16.20 in the third, vacancy rates continue to improve. The vacancy rate dropped to 7.8 percent from 8 percent in the second quarter. That, coupled with positive absorption for all three quarters fo 2011, points to a strenghthening retail market.