Office vacancy in the Denver metro area continues to improve as the direct vacancy rate drops to 16.9% in Q3. The average lease rate for Q3 was $22.51 per square foot which was nearly a 9% increase from Q3 2012 and a small increase from Q2’s $21.99 per square foot (full service gross). Year to date, the net absorption for the Denver metro area was 1.4 million square feet while another 654,447 square feet of office space (new construction) was delivered. Currently, there is approximately 136.26 million square feet of office space in the entire Denver metro area with another 2.36 million square feet under construction. The downtown market saw the highest lease rate, $29.11 while the lowest came from the suburban market at $20.15 per square foot (not including the southeast).  Downtown office vacancy rate for Q3 stood at 13.7% while LoDo came in at sub 7% vacancy rate. The median lease rate for LoDo office space was $29.25 which is a 12.25% higher than the median lease rate for central business district. Additionally, downtown lease rates are projected to hit $32 per square foot by year end. Class A office rates downtown inched slightly lower from July, to $31.25 per square foot, whereas Class B office rates increased to $24.04. Below are some of the biggest lease deals in Q3:

PaySimple at 1515 Wynkoop St.  15,487 square feet
Jagged Peak Energy at 1125 17th St.  20,285 square feet
Junction Solutions at 4643 S. Ulster St.  21,416 square feet