Sub-Leased Office Space Increases by 72%

According to CBRE, a huge commercial RE firm there's more than 4.3 million square feet of technically "occupied" office space, but this is space that is available for sub-leasing. Normally commercial leases are for 5-10 years at least and if a business no longer needs the space they try to sub-lease their space to a new tenant for the remainder of their lease. Before COVID hit there was 2.5 million square feet of space that was available for sublease. This is an increase of 72%.

Second, the office vacancy rate ticked up to 16.3% in the 3rd quarter as energy, media, and tech sectors leave office spaces vacant. I expect more and more energy companies will abandon their office spaces in metro Denver due to the regulatory climate of CO.

And there is another 3.3 million square feet of office space being built in the metro area with 2.6 million square feet of that space being built on a spec basis. Pete Schippits, the President of CBRE's mountain-northwest division isn't worried by these numbers as he said Denver has traditionally been a touch-first, lease-second market. I sure hope he is correct. But, I wouldn't want to own any traditional commercial office space currently.