Conversions, Stadiums Could Give Denver A Needed Boost

Challenges persist for Denver's commercial real estate market, but a planned slate of conversions and a few megadevelopments provide a ray of hope for a rebound.

Office vacancy remains high, driving corresponding elevated loan delinquencies attached to many downtown properties. But several conversion projects are underway, which will slowly begin to shave off bits of vacant space.

“We’re not necessarily seeing growth in demand for office, so hopefully what will happen is that more of the bottom, functionally obsolete office is going to fall off the rolls,” Carl Koelbel, president and CEO of Koelbel & Co., said during Bisnow’s 2026 Denver Forecast, held Jan. 29 at the Grand Hyatt Denver.

Koelbel said demand will also drive whether the so-called zombie buildings — offices where the cost to upgrade the building would be more than it could collect in rental revenue — will be torn down, reused or replaced.

The Downtown Denver Partnership estimates around 11M SF of downtown office space is vacant and has set a goal to convert or reuse 7M SF. At least a dozen conversion projects are already in the works, and several have received state or local subsidies.

In addition to the investments in conversions, other significant investments in the city include new professional soccer and football stadiums, the expansion of Ball Arena and the National Western Center, and the development of Park Hill Park and River Mile.

Brad Buchanan, CEO of the National Western Center Authority and director of the city’s planning department, said he is optimistic about what all of the activity signals for the future. He emphasized the need to prioritize connectivity between the projects and downtown to make them as successful as possible.

“It absolutely rises the tide for every single boat,” Buchanan said. “We’re becoming a both-and city with these great neighborhoods around (downtown) that are all becoming stronger.”

Buchanan also pointed to declining rents as a sign of a healthy housing market moving through oversupply. He is hopeful that improving affordability will make downtown a more attractive place to live.

With all of the development, making sure jobs and population are keeping up will be key, Koelbel said.

“When I look at what is a driver of top-line job growth, I’m struggling to see what industries want to reinvest, double down and grow in Colorado,” Koelbel said. 

The latest census numbers show Colorado’s population growth is slowing, and more people moved out of the state than moved in for the first time in decades.

For some new developments, a lack of available power poses a problem, according to Celeste Tanner, president and chief development officer at Confluent Development.

She has had trouble securing power even for smaller businesses. 

“Cheap, reliable power is absolutely necessary to keep even our local businesses thriving,” she said.

Tanner said she thinks Denver is moving into the fundamentals stage of the cycle and she believes the city will thrive there if it can address its perception problem.

“I’ve sat with investors and equity, and the reality is that the first hurdles that we have to overcome are that Denver is expensive, Denver is cumbersome, and Denver is unpredictable. Capital hates those three things,” Tanner said. 

To change that perception, Tanner said the city should focus on improving affordability.

“We need to be a more affordable city to keep bringing people here, and that’s about more than rent,” she said.