Occupancy rates in Denver offices remain below pre-pandemic levels
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Office buildings in downtown Denver and across the country are still struggling to return to their pre-pandemic occupancy levels.
Why it matters: Fewer workers downtown has a ripple effect on restaurants, bars and retailers, and a sustained slump could signal a game-changing shift for Denver's economy and cities nationwide.
Driving the news: Office vacancies in Denver's Central Business District were at 25% in the first quarter of 2022, according to a new report by real estate firm Cushman & Wakefield.
- In Denver's River North Art District, rates were even higher at 30%.
- Mayor Michael Hancock's administration told city council members last week that the lack of office workers continues to impede the city's economic recovery.
What's happening: There appears to be an executive-employee disconnect when it comes to returning to the office, Axios' Erica Pandey writes, citing a Slack Future Forum report.
- 75% of CEOs and other corporate leaders are eager to work in person, while only 37% of rank-and-file workers want to return.
- Market research experts warn that an imbalanced return to the office could lead to proximity bias that fosters salary increases and promotions for in-person employees over their remote colleagues — particularly women and people of color, who are more likely to prefer working from home.
Yes, but: Across the Denver metro, office vacancy has shown more signs of stabilizing with rates at about 20% for a second consecutive quarter, according to Cushman & Wakefield data.
- Many offices have begun requiring the switch to in-person, pre-pandemic ways of working, including the Denver Metro Chamber of Commerce, president and CEO J.J. Ament told Axios Denver in a statement.
What to watch: New construction in Denver is likely to exacerbate the high vacancy rates, according to a new report by Tributary Real Estate, a Denver-based commercial firm.
- Another wave of fresh office buildings is on the horizon this year, with new projects breaking ground across the metro, from the Central Business District and RiNo to Cherry Creek and Boulder.