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Guidance Corporate Realty Advisors

COMMERCIAL TENANT AND BUYER REPRESENTATION

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Denver Commercial Real Estate Market Update

                                            OFFICE MARKET - 1st Quarter 2012

The Denver Office market ended the first quarter 2012 with a vacancy rate of 12.9%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 488,766 square feet in the first quarter. Vacant sublease space decreased in the quarter, ending the quarter at 770,341 square feet. Rental rates ended the first quarter at $19.76, a decrease over the previous quarter. A total of five buildings delivered to the market in the quarter totaling 312,760 square feet, with 704,648 square feet still under construction at the end of the quarter. 

Office Absorption
Net absorption for the overall Denver office market was positive 488,766 square feet in the first quarter 2012. That compares to positive 611,196 square feet in the fourth quarter 2011, positive 666,325 square feet in the third quarter 2011, and positive 292,670 square feet in the second quarter 2011.

Office Vacancy
The office vacancy rate in the Denver market area decreased to 12.9% at the end of the first quarter 2012. The vacancy rate was 13.0% at the end of the fourth quarter 2011, 13.3% at the end of the third quarter 2011, and 13.6% at the end of the second quarter 2011.

Office Sublease Vacancy
The amount of vacant sublease space in the Denver market decreased to 770,341 square feet by the end of the first quarter 2012, from 853,929 square feet at the end of the fourth quarter 2011. There was 949,092 square feet vacant at the end of the third quarter 2011 and 971,148 square feet at the end of the second quarter 2011.

Office Rental Rates
The average quoted asking rental rate for available office space, all classes, was $19.76 per square foot per year at the end of the first quarter 2012 in the Denver market area. This represented a 0.1% decrease in quoted rental rates from the end of the fourth quarter 2011, when rents were reported at $19.77 per square foot.

Total Office Vacancy and Leasing Rates* for key submarkets in the Metro Denver, Colorado area:

Submarket

Class

Vacancy

Avg. Lease
Rates/SF*
 Denver Central Business District A 10.9% $26.91
 Denver Central Business District B 16.7% $19.80
 Denver Tech Center (DTC) A 11.4% $21.92
 Denver Tech Center (DTC) B 19.5% $18.30
 West A 5.5% $24.90
 West B 15.1% $18.25
 Northwest A 15.9% $23.14
 Northwest B 9.9% $18.26
 Boulder A 9.5% $16.30
 Boulder B 8.1% $20.59

  *   Quoted Lease Rates/square foot are full service gross, including all operating costs.
  

                                           INDUSTRIAL MARKET - 1st Quarter 2012

The Denver Industrial market ended the first quarter 2012 with a vacancy rate of 8.4%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 336,694 square feet in the first quarter. Vacant sublease space increased in the quarter, ending the quarter at 424,432 square feet. Rental rates ended the first quarter at $5.85, an increase over the previous quarter. A total of one building delivered to the market in the quarter totaling 8,666 square feet, with 375,859 square feet still under construction at the end of the quarter.
 
Industrial Absorption
Net absorption for the overall Denver Industrial market was positive 336,694 square feet in the first quarter 2012. That compares to negative (280,540) square feet in the fourth quarter 2011, positive 936,081 square feet in the third quarter 2011, and negative (53,882) square feet in the second quarter 2011.
 
Industrial Vacancy
The Industrial vacancy rate in the Denver market area decreased to 8.4% at the end of the first quarter 2012. The vacancy rate was 8.5% at the end of the fourth quarter 2011, 8.4% at the end of the third quarter 2011, and 8.7% at the end of the second quarter 2011.
 
Sublease Vacancy
The amount of vacant sublease space in the Denver market increased to 424,432 square feet by the end of the first quarter 2012, from 407,181 square feet at the end of the fourth quarter 2011. There was 392,334 square feet vacant at the end of the third quarter 2011 and 744,923 square feet at the end of the second quarter 2011.
 
Rental Rates
The average quoted asking rental rate for available Industrial space was $5.85 per square foot per year at the end of the first quarter 2012 in the Denver market area. This represented a 0.2% increase in quoted rental rates from the end of the fourth quarter 2011, when rents were reported at $5.84 per square foot.
 
Source: The Costar Office and Industrial Market Reports – 1st Quarter 2012

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Guidance Corporate Realty Advisors provides Corporate Tenant / Buyer Representation services to corporate real estate users in the Denver metropolitan area including Boulder, Colorado.  Guidance also provides these services in all major U. S. markets, as well as markets in Canada, Asia, South and Central America, and Europe.  To contact: (303) 442-5400; Email for Information; 5330 Manhattan Circle, Suite G, Boulder, CO 80303; 5231 Monroe Street, Suite 200, Denver, CO 80216.
BOULDER OFFICE
5330 Manhattan Circle
Boulder, CO 80303		 DENVER OFFICE
5231 Monroe Street
Denver, CO 80216		 PH: 303.442.5400
FX: 303.545.6581
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