Jan 31, 2024 - News

Denver's office vacancies hit new record

Metro area office vacancy rate, Q4 2023
Data: Moody's Analytics; Chart: Axios Visuals

Denver's office buildings are sitting emptier than they've been in decades.

The big picture: Office buildings both locally and nationally are clearing out as companies continue to adapt to the new norms of remote and hybrid work, leaving downtowns largely deserted.

By the numbers: 21.7% of office space across the Denver metro area was vacant at the end of last year, exceeding the national average of 19.6%, according to Moody's Analytics data.

Zoom in: In the heart of downtown, data from commercial real estate firm CBRE shows vacancy rates were even more severe at 31.5% β€” the highest level since the '90s, per the Denver Post.

  • No new development projects kicked off this past quarter either, making 1900 Lawrence the only downtown building under construction, according to CBRE.

What they're saying: Getting people to return to in-person work remains one of the city's top challenges and is "deeply important" to fostering equity, Mayor Mike Johnston told business leaders at an event last week hosted by the Denver Business Journal.

  • "When people don't return to downtown," lower-wage workers in the retail and restaurant industries β€” who can't work remotely β€” risk losing their jobs and the ability to "put food on their own table," he said.

State of play: Because Johnston sees the city government as "one of the critical employers to shore up upper downtown," he's mandated that all mayoral appointees work in person five days a week, while other city staff are required to show up at least three days.

Zoom out: While Denver's mayor and other employers are aiming to bring their workers back into the office, many company leaders have already moved past that idea.

  • Just six out of 158 U.S. CEOs said they'll prioritize bringing workers back to the office full-time in 2024, according to a new survey released by the Conference Board, Axios' Emily Peck writes.

The bottom line: "Remote work appears likely to be the most persistent economic legacy of the pandemic," write Goldman Sachs economists in a recent note.

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