Denver’s office market is showing glimmers of hope that indicate a shift toward stabilization, but brokers say it will take time to turn the market around. 

Last quarter, Denver reported its strongest net absorption and leasing activity since the first quarter of 2022, according to Cushman & Wakefield and CBRE. Total leasing activity reached 1.7M SF, up 30% year-over-year, and office tenants took about 120K SF more than they vacated.

Denver brokers are also noticing that tenants are signing larger deals, often with longer terms, than they have since the pandemic. The impact of these newer deals has yet to appear in market reports.

“There are multiple 100K SF tenants not just touring the market but trading paper,” said Ryan Link, executive vice president of CBRE’s office occupier leasing group. “To my knowledge, none of those are looking at short term. They’re all looking at 10-plus-year terms, some of which are looking at 15-year terms. The big deals are the needle movers.”

"I think once some of these bigger deals land, it’s going to be a different world here in a year or two,” Link said.

Some of these deals have already been announced, although not all companies have moved into their new spaces.

Last quarter, the Colorado Housing and Finance Authority signed a 30K SF lease at 1900 Lawrence St., National Cattlemen’s Beef Association inked a 43K SF lease at 8900 Liberty Circle, and UMB Bank signed a 55K SF prelease for an office in Cherry Lane, a redevelopment project in Cherry Creek North, according to Avison Young’s Q2 report. 

SM Energy signed a 50K SF expansion at 1700 Lincoln St., now occupying five floors and about 124K SF of the building. More recently, Spring Fertility signed a 15-year, 13K SF lease at 1900 Lawrence St., and Alterra Mountain Co. signed a two-floor, nearly 65K SF lease at 101 W. Colfax Ave. for 12 years.

During the pandemic and in the years that followed, full-floor, 10-year leases in the Mile High City were rare. Instead, companies signed short-term leases and often reduced their footprint, but the tide is turning.

“If I look at Denver as a whole, the office picture really isn’t too bad,” Adam Abeln, Real Capital Solutions chief investment officer and managing director, said at a Bisnow event on Sept. 24. “There’s about 6.5M of active tenants, square feet-wise, in the market looking for space. That’s up about 39% from January.”

Denver-based real estate firm TRE said its average deal is 8,300 SF. Tenants taking 5,000 SF or more are opting for leases that don’t expire for at least five years, TRE partner and Managing Broker Andy Cullen said.

“Most of the deals we’re working on are even longer-term deals now than they were in 2025,” Cullen said. “So I think our 2026 numbers will continue to extend out because people are now making those commitments as they start to see their business plans solidify.”

Long-term deals will have a trickle-down effect and improve the macro need of Denver’s office market, Link said.

“The activity level has picked up,” Cullen said. “It was great to see the Q2 stats come out that have shown that, because over the last year, we’ve very much felt it from a boots-on-the-ground perspective. But you’re really starting to see that in the numbers, and I truly believe that trend is going to continue.”

Despite the momentum, Denver’s vacancy hovers between 26.6% and 28.7%, and large office tenants, such as Optiv Security and Palantir Technologies, are relocating to other states.

To fill empty office space, landlords are offering aggressive concessions, something brokers don’t expect to go away anytime soon.

“The concessionary market is the most aggressive that I’ve ever seen in my career,” said Link, who has worked in commercial real estate for 13 years. 

Concessions include record-high tenant improvement allowances, free rent packages with multiple years of free rent, and up to three years of free parking. TI allowances have grown from the $90-to-$100-per-SF range to $125 to $150 per SF, Cullen said.

“If you find the right landlord that can and is willing to transact in this environment, the terms that you’re achieving are super aggressive,” Link said.

There are still outliers, such as office space in Cherry Creek and new construction in Denver, where concessions can be hard to come by. But large tenants looking for a long-term deal outside of these buildings are getting “incredible concessionary packages from these landlords,” Link went on to say.

Concessions are a byproduct of a soft market, building owners under a debt crisis and increasing construction costs. 

“There’s still so much space to be absorbed that I don’t think it’s going to turn on a dime, and all of a sudden these concession packages go away, and it becomes a landlord market,” Link said. “I think there’s so much wood to chop, if you will, that it’s still going to be a tenants’ market for quite some time now.”