Office Has Some Sizzle Too
Denver's office market is benefiting from the influx of jobs. Savills Studley EVP and branch manager of its Denver Tech Center office Jim McGrath tells us that "the continued strength of the Denver office market is driven primarily by demand. The absorption of space by both local companies expanding, as well as relocations from other markets, has decreased available space. The activity is diverse and spread out among multiple industries." Jim's snapped doing a little mountain biking recently at Crested Butte.
The latest Savills Studley Effective Rent Index, which tracks what tenants pay for Class-A office space, and what landlords get out of the deal, has good news for Denver landlords. Effective rent is up 6.8% since last year, coming in at $29.14, well above pre-recession peak of $24.96 in 2007. Also, relative to base rents, the value of concessions appears to have peaked in late 2013 or early 2014. Tenants looking for full floors of space in LoDo or view space across all of Downtown had very limited options and landlords became less flexible throughout the year.
