Denver office leases set a record high for the third quarter with a net absorption of 1,070,775 square feet, lowering the vacancy rate to 10.6%. This was a substantial increase compared to fourth quarter of 2013 with net absorption of 454,424 square feet. Rental rates ended for the quarter at $22.88 which was an increase from previous quarter. A total of 6 new buildings were delivered to the market for the quarter, totaling 650,818 square feet, while another 1,860,932 square feet is still under construction.
Net absorption for Class A office buildings for the third quarter stood at 407,291 square feet which was an increase compared to fourth quarter of 2013 with a net absorption of 114,349 square feet. Net absorption for Class B office buildings was 671,370 square feet in third quarter, compared to fourth quarter of 2013 with a net absorption of 312,308 square feet.
Average asking rental rate for available Denver office space for all classes stood at $22.88 per square foot which was an increase of 1.5% from second quarter of 2014. Average asking rental rate for Class-A office stood at $28.15, Class-B rates stood at $20.15, and Class-C rates at $16.07. The highest average asking rental rate was in Denver’s CBD (Central Business District) at $30.48 per square foot. Overall vacancy rate for CBD stood at 12.4%.
The largest lease deal YTD was the 250,900 square foot lease signed by CoBank at 6360 S. Fiddlers Green Cir.