Denver Southeast Office Figures Q4 2025

Net absorption turned positive for the first time in two years in Q4 2025, driving a moderate decline in vacancy and indicating signs of an emerging recovery but demand-side fundamentals are still demonstrating some volatility through the lens of leasing activity. Net absorption amounted to positive 142,000 sq. ft. in Q4 2025, a shift from seven straight quarters of negative absorption. For the year, net absorption totaled negative 459,000 sq. ft., a modest improvement from 2024’s negative 517,000 sq. ft. Total vacancy declined 40 basis points in Q4 2025 and posted a slight increase of just 80 basis points year-over-year. Sublease availability declined 152,000 sq. ft. in Q4 2025, falling to 1.7 million sq. ft. The average direct asking rent softened slightly quarter-over-quarter to $28.70 per sq. ft. FSG, while remaining essentially flat year-over-year.

Rolling four-quarter leasing activity decreased 29.3% to 1.2 million sq. ft., compared to 1.7 million sq. ft. seen a year earlier and despite a resurgence in Q4 when activity rose 61.1% quarter-over-quarter. The submarket’s construction pipeline remained at a standstill, with the trend unlikely to change in 2026 given persistent softer demand among larger users that necessitates preleasing along with elevated construction and capital costs. Planned office-to-residential conversions will offer incremental supply relief over time, allowing for a greater balance between supply and demand in 2026.