Denver Downtown Office Figures Q1 2026

Downtown Denver's office market closed Q1 2026 showing continued signs of stabilization, although demand‑side challenges persist. Total vacancy was largely unchanged, rising 20 bps quarter-over-quarter to 38.9%, while direct vacancy edged up 30 bps, driven primarily by sublease space reverting to landlords with a smaller contribution from tenant space reductions. Although net absorption remained negative at 56,000 sq. ft., it improved 10.6% from the prior quarter and 77.4% year-over-year. Sublease availability continued its decline, falling 14.9% quarter-over-quarter and 30.0% year-over-year to 1.0 million sq. ft.

Rolling four-quarter leasing activity totaled 1.8 million sq. ft., up 5.5% from last quarter but down 24.6% year-over-year. Q1 2026 activity was highlighted by Vertafore's 142,000 sq. ft. renewal at 999 18th St., the submarket's largest transaction since Q4 2024. The average direct asking rent remained largely stable in Q1 and posted a slight year-over-year decrease of 1.6% to $41.33 per sq. ft. FSG. Investment sales consisted of one notable transaction trading at a discounted basis as the pricing reset for Downtown office product continues. With several multifamily conversion projects in the pipeline and leasing velocity among Downtown’s higher-quality assets accelerating, the conversation is shifting toward the potential undersupply of new and prime Class A space, a dynamic that could meaningfully reshape the submarket's trajectory over the next several years.