Denver Office Vacancy Ticks Down For The First Time Since 2019

For the first time since the pandemic, Denver’s office vacancy rate declined, seeing a minor quarterly drop of 20 basis points to 28.3%, according to CBRE’s Q4 report.

The dip is slight and vacancy is still up by 1.5% year-over-year, but the decrease is a welcome sign nearly six years after the pandemic upended office markets nationwide.

“I just see downtown only going up from here,” said Sarajane Goodfellow, senior vice president at CBRE. “I feel like our vacancy has hit its high water mark.”

Denver’s downtown submarket is still experiencing one of the higher vacancy rates at 38.2%, while Cherry Creek bucks most of the trends. Cherry Creek’s vacancy is the lowest of any submarket in the city at 12.6%. 

The submarket disparity indicates the flight-to-quality trend continues to drive leases. In Cherry Creek, Class-A office buildings have a direct vacancy rate of 0.5%. The flight to quality is no longer just about having an ideal location but also having the right amenity stack and design features, Goodfellow said.

Even in downtown, Class-A properties have lower vacancy and higher rents. Downtown submarkets with higher rates of new builds, such as Lower Downtown and Union Station, are capitalizing on the trend, Goodfellow said.

“Tenants really are vying for state-of-the-art amenities. They want ideally new construction, a good glass line,” she said. “They want their employees to be happy and motivated to be in the office.”

One such property is 1125 17th St., according to Goodfellow. Owner Hines spent $25M upgrading the lobby, tenant lounge and wellness center, completing work last year. Occupancy at the property, built in 1980, has increased from around 65% to close to 90%, she said.

With Cherry Creek’s geographical constraints, Goodfellow said she believes recent investments downtown will draw more tenants to quality buildings in the central business district.  

“I think downtown, especially with the 16th Street and Downtown Denver Partnership prioritizing retail, should improve as well and work off what Cherry Creek has done,” she said.

Goodfellow thinks the LoDo micromarket could even reach single-digit vacancy rates this year, which could then encourage tenants to explore other downtown locations. At the end of last year, LoDo’s vacancy was 19.3%.

“If that happens, it starts a tidal wave to fill in the other side of downtown and the rest of the CBD,” she said.

Denver’s construction pipeline is slowing, with 476K SF under construction in the metro area at the end of 2025. Additionally, several vacant office buildings downtown are planned for conversion, which CBRE predicts will help stabilize the vacancy rate.

The market also posted net positive absorption of 203K SF in the last quarter of 2025, taking some of the sting out of the annual net negative absorption of 1.8M SF. 

Improved price discovery and opportunistic buyers also led to increased investments of $370M, up from $220M in Q3.

While the industry does face potential headwinds from a slowing population and older building stock, Goodfellow said the perspective on the ground is one of opportunity.

“We’re seeing dynamics improve, and it’s going to take a minute, probably through 2026, but from there, we’re really feeling good about the future,” she said.