Downtown Denver's office vacancy rate hit 38.2% at the end of 2025. That is not a typo. More than a third of downtown office space is sitting empty. If you are a commercial tenant looking to build out a new space in the Denver metro, this is the most leverage you have had in over a decade. Landlords are competing for tenants, concessions are climbing, and tenant improvement allowances are negotiable in ways they were not two years ago.
How Bad Is Denver's Office Vacancy, Really?
The headline number is 38.2% for downtown Denver, but the real story is in the submarkets. Not every part of the metro is struggling equally.
- Uptown (east of Broadway): 45.3% vacant. The hardest hit submarket in the city.
- East of Larimer Street: Above 40% across the board.
- Denver suburbs overall: 28.3%. Better, but still elevated.
- Cherry Creek: 12.6%. One of the best performing submarkets in the entire country, according to CBRE's 2026 outlook.
Class C buildings downtown are nearly 50% vacant. Some are completely empty. A developer is already demolishing a downtown office building and converting the site to housing. That tells you where the floor is for the lowest quality office stock.
Meanwhile, prime and Class A properties are stabilizing around 20% to 27% vacancy. Tenants want quality space. The flight to quality is real, and it is widening the gap between the best buildings and everything else.
Why This Is a Tenant's Market
When a third of all office space sits empty, landlords do not have the luxury of being selective. They need tenants. That need translates directly into better terms for you.
Here is what we are seeing in the Denver market right now.
Higher TI allowances. Landlords are offering more generous tenant improvement dollars to attract quality tenants, especially in Class A buildings trying to maintain occupancy. In the Denver metro, TI allowances range from $15 per square foot on the low end to $60 or more per square foot for Class A space with longer lease commitments. Two years ago, the top of that range was harder to negotiate. Today, it is a starting point for conversation.
Free rent periods. Rent abatement during construction is increasingly common. If you are building out a 5,000 SF office and the construction takes 12 weeks, landlords are more willing to give you that time rent free. On a $28/SF lease, that is roughly $16,000 you keep in your pocket.
Flexible lease structures. Shorter initial terms, expansion options, and early termination clauses that would have been nonstarters in a tight market are all on the table now.
Where Should You Be Looking?
The vacancy numbers tell a clear story about where the opportunities are strongest.
Downtown Class B and C buildings are offering the steepest concessions because they have the most to lose. If your business does not require a trophy address, these buildings can deliver significant savings. Just make sure the building systems (HVAC, electrical, elevators) can support your buildout. We have seen tenants get a great lease rate on a building where the base systems needed $50,000 in upgrades that were not in the TI allowance.
Suburban markets like the DTC, Greenwood Village, and Lakewood are sitting at 28% vacancy overall. For businesses that do not need a downtown address, the suburbs offer shorter permit timelines, easier parking, and landlords who are motivated but not desperate.
Cherry Creek is the exception. At 12.6% vacancy, it is a landlord's market within a tenant's market. If Cherry Creek is where you need to be, expect tighter negotiations and lower TI allowances relative to the rest of the metro. But even there, CBRE projects up to 5% rent growth, which means landlords still want to lock in good tenants before rates climb further.
How to Turn Vacancy Into a Better Build
Getting a good lease is only half the equation. The other half is making sure your TI allowance actually covers the buildout you need. Here is how to maximize the opportunity.
Get your GC involved before you sign the lease. We review spaces with tenants during the lease negotiation phase. We can tell you whether the existing conditions (MEP, ceiling grid, restroom locations) work for your layout or whether you are inheriting problems the landlord should be fixing. That assessment changes the TI allowance conversation entirely.
Negotiate the TIA against real numbers, not guesses. A $40/SF allowance sounds generous until you learn your buildout actually costs $85/SF. We help tenants understand the gap between the allowance and the actual construction cost before they commit. We covered real TI cost ranges in Denver in detail.
Push for landlord base building work. In a high vacancy market, you can often negotiate for the landlord to handle base building improvements (new HVAC units, restroom upgrades, ADA path of travel) outside of your TI allowance. On one recent project, we helped a tenant get the landlord to cover structural repairs that would have eaten $30,000 of TI dollars. That money went toward the tenant's actual buildout instead.
The Stabilization Signal You Should Watch
One number that does not get enough attention: downtown Denver's sublease inventory dropped from nearly 2.5 million square feet to 1.2 million square feet over the past year. That is a 50% reduction. It means companies that were trying to dump excess space are pulling those listings and committing to their footprint.
That is a stabilization signal. It does not mean vacancy is about to plummet, but it does mean the bottom may be forming. CBRE's 2026 outlook projects 1% to 2% rent growth marketwide, with stronger growth (up to 5%) in prime submarkets like Cherry Creek and LoDo.
For tenants, the window of maximum leverage is right now. When sublease inventory drops and vacancy starts tightening, landlord concessions tighten with it. The tenants who are signing leases in 2026 are getting terms that will not be available in 2028.
What This Means for Your Next Project
If you have been thinking about a new office, relocating to a better space, or expanding your footprint, the Denver market is working in your favor right now. Higher TI allowances, motivated landlords, and flexible terms mean your construction dollar goes further.
But the opportunity only works if you negotiate the right deal and build it correctly. A generous TI allowance on a bad lease is still a bad deal. And a great lease with a sloppy buildout is wasted money. Read about the contract red flags worth watching before you sign anything.
Thinking about a new space? Here is how we approach office and retail buildouts, or start a conversation directly. Call 833-SNYDER-9 (833-769-3379). We will walk through your space, your numbers, and your lease terms before you commit to anything.
Next read: How Much Does a Commercial TI Cost in Denver? (2026)