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Avison Young releases Third Quarter 2022 Market Reports for Denver office and industrial sectors
Denver, CO – Avison Young has released its Third Quarter 2022 Office and Industrial Market Reports for Denver. Denver’s office market recovery continues to be in line with peer cities regarding return-to-work. The area’s office utilization rate sits at roughly 57% as of the week following Labor Day which has been about the same for the past year. Meanwhile, Denver continues to be an important logistics hub for the Rocky Mountain states, with 26 Amazon distribution facilities in the area. The region is also evolving into a hub for biotech, aerospace, and clean energy innovations.
“While Denver is experiencing a slow recovery in the office sector overall, there are certain parts of the region that are seeing strong rents and a significant amount of leasing activity including the Cherry Creek submarket which has a low vacancy of just 6.7%. With impressive in-migration numbers and jobs growth, we continue to be bullish on the long-term future of this incredible city that we have the privilege of calling home,” said Marcy Moneypenny, Principal and Managing Director for Avison Young’s Denver office.
Despite office vacancy being at an all-time high, average asking rents for direct space are holding at $31.48 per square foot (psf)/full-service, having risen by 4.6% since Q4 2021. Landlords are now offering a discretionary allowance in addition to a tenant improvement allowance and more flexible lease terms to attract new occupiers. Landlords choosing to renovate and enhance the tenant experience by highlighting convenience, wellness and lifestyle amenities are starting to recoup their investment via multiple lease signings.
With more than 13 million sf of industrial product under construction in the region, the first three quarters of 2022 experienced 7 million square feet of deliveries, accounting for 3% of the total inventory and more than typically delivered historically. These projects are preleasing by up to 15%, with Boulder and Weld counties experiencing the highest leasing velocity for new developments. Industrial leases are taking nine to 12 months on average to build-out which is prompting tenants to begin their site selection process earlier than normal. Tenants have also been impacted by rising interest rates, adding a constraint to their cost of goods purchasing power.
Avison Young creates real economic, social and environmental value as a global real estate advisor, powered by people. As a private company, our clients collaborate with an empowered partner who is invested in their success. Our integrated talent realizes the full potential of real estate by using global intelligence platforms that provide clients with insights and advantage. Together, we can create healthy, productive workplaces for employees, cities that are centers for prosperity for their citizens, and built spaces and places that create a net benefit to the economy, the environment, and the community.
Avison Young is a 2022 winner of the Canada's Best Managed Companies Platinum Club designation, having retained its Best Managed designation for 11 consecutive years.
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“While Denver is experiencing a slow recovery in the office sector overall, there are certain parts of the region that are seeing strong rents and a significant amount of leasing activity including the Cherry Creek submarket which has a low vacancy of just 6.7%. With impressive in-migration numbers and jobs growth, we continue to be bullish on the long-term future of this incredible city that we have the privilege of calling home,” said Marcy Moneypenny, Principal and Managing Director for Avison Young’s Denver office.
Despite office vacancy being at an all-time high, average asking rents for direct space are holding at $31.48 per square foot (psf)/full-service, having risen by 4.6% since Q4 2021. Landlords are now offering a discretionary allowance in addition to a tenant improvement allowance and more flexible lease terms to attract new occupiers. Landlords choosing to renovate and enhance the tenant experience by highlighting convenience, wellness and lifestyle amenities are starting to recoup their investment via multiple lease signings.
With more than 13 million sf of industrial product under construction in the region, the first three quarters of 2022 experienced 7 million square feet of deliveries, accounting for 3% of the total inventory and more than typically delivered historically. These projects are preleasing by up to 15%, with Boulder and Weld counties experiencing the highest leasing velocity for new developments. Industrial leases are taking nine to 12 months on average to build-out which is prompting tenants to begin their site selection process earlier than normal. Tenants have also been impacted by rising interest rates, adding a constraint to their cost of goods purchasing power.
Avison Young creates real economic, social and environmental value as a global real estate advisor, powered by people. As a private company, our clients collaborate with an empowered partner who is invested in their success. Our integrated talent realizes the full potential of real estate by using global intelligence platforms that provide clients with insights and advantage. Together, we can create healthy, productive workplaces for employees, cities that are centers for prosperity for their citizens, and built spaces and places that create a net benefit to the economy, the environment, and the community.
Avison Young is a 2022 winner of the Canada's Best Managed Companies Platinum Club designation, having retained its Best Managed designation for 11 consecutive years.
www.avisonyoung.com
Follow Avison Young
Twitter (News) │ Twitter (Deals) │ Blog │ LinkedIn │ YouTube │ Instagram
For more information:
- Download Third Quarter 2022 Office Market Report and Industrial Market Report
- Marcy Moneypenny, Principal & Managing Director: +1.303.800.1040
- Anne McWhirter, Insight Analyst: +1.303.390.0965