Downtown Denver's office vacancy rate grows to 38.2%

https://coloradosun.com/2026/01/22/denver-downtown-office-vacancy-rate-tenants-workplace/

42•mooreds•1h ago

Comments

rbanffy•1h ago

Looks like there is an opportunity to convert a lot of that into residential space.

shagie•1h ago

Not necessarily. Things like "where do pipes run" so can get tricky along with code requirements for access.

There's a NYT article on the challenges about this from a few years ago: So You Want to Turn an Office Building Into a Home? -- Here’s How to Solve a 25-Story Rubik’s Cube https://www.nytimes.com/interactive/2023/03/11/upshot/office...

toomuchtodo•1h ago

While converting it is not economical, class c office space (which is least desirable) demand is probably gone in this market due to lackluster demand for office space; the value of the building will get zeroed out by the market, at which point it can trade hands, be demo'd, and new residential can go up in its place.

You can think of class c office space, broadly speaking, as oil wells that have very little life left, and get bought up by folks who intend to extract the cashflow until they dump the externality on the public government and taxpayers (like abandoned shopping malls).

A recent example in St Louis is the AT&T office tower [1] [2].

[1] One of St. Louis’ tallest office towers, empty for years, sells for less than 2% of its peak price - https://www.costar.com/article/642008108/one-of-st-louis-tal... - April 10th, 2024 ("Goldman Group buys 44-story former AT&T office tower for $3.6 Million")

[2] St. Louis office vacancy hits all-time high [21.2%] as major companies downsize their footprints - https://www.bizjournals.com/stlouis/news/2026/01/15/office-v... - January 16th, 2026

(conversions when the economics pencil out, haircuts for investors when they don't and more investment is needed to wholesale replace a structure)

US office vacancy rates chart supposedly pulled from Moody's: https://old.reddit.com/r/charts/comments/1p8mhmq/us_office_v...

dnemmers•57m ago

Great article with diagrams and overlays. Good share.

xnx•46m ago

Article from 1 month ago on how conversions have become much more feasible with some clever hacks: https://www.wsj.com/real-estate/commercial/nyc-office-reside...

someuser54541•1h ago

I read something at some point that it's more expensive to convert these into residential buildings than it is to literally demolish and rebuild.

I'm not entirely sure how that math works out, or why, because one would think it couldn't be that complicated. Maybe someone here knows more about this.

paularmstrong•1h ago

I assume it's because they would need to re-wire electrical and retrofit plumbing on a massive scale to accommodate kitchens and bathrooms for separate units. They end up needing to gut the entire building and cut through floors and ceilings without damaging any structural and load-bearing parts. It doesn't sound easy nor cheap.

mullen•1h ago

The plumbing systems in commercial buildings are not big enough to handle residents usage. Residents use more water and the outbound sewage systems need to be larger.

mothballed•1h ago

There's already enough plumbing in there for a whole office to shit when they get to the office.

History favors the bold, and code inspectors blabbering about "written in blood" don't see all the homeless people they kill via reduced access to housing.

I've seen plenty of artist collectives that manage it; on paper they are office/industrial but actually everyone lives there. Every once in awhile one burns down but the mortality rate isn't as high as living on the streets which is ultimately what happens to those on the bottom of the socio-economic pyramid when the ones higher up push the ones under them down a rung to snag housing.

vel0city•1h ago

For a lot of the office buildings I've been in, there aren't that many toilets per floor. Its also different when you've got some toilets that are often unused compared to people running laundry, cooking, bathing, etc. Very different demands on the plumbing system.

You also then had everything pretty much isolated to two rooms for an entire floor meanwhile now every unit is going to have a separate kitchen, a bathroom (or two, or three), a laundry room, etc.

And you're going to need a good bit of engineering studies done before you start cutting that many holes in the floor.

someuser54541•1h ago

Ok, but some extra plumbing (and whatever sorts of engineering studies referred to) and electrical work surely can't as expensive as demolishing and rebuilding a whole building.

These seem like extremely solve-able problems.

bethekidyouwant•59m ago

Now watch the video to find out why you’re wrong

usrusr•50m ago

But do you really have to cram in as many residents as you could with a purpose-built tenement? There must be ways to keep headcount in the range the infrastructure can support and still provide a lot more housing than just leaving them as empty decaying offices owned by the last one holding the bag. Intersperse flats with windowless storage units (you have a depth problem anyways), low density commercial use like workshops with live-by flats and so on. Large units designed to attract high squarefeet/low headcount tenants, not bunk bed families. Add regulation only as a fallback limiter. Don't let perfect be the enemy of good.

boelboel•57m ago

Artists are a shrinking population, I wonder if having most of the top floors (20 out of 30) converted to extremely large luxury apartments (5000sqft+) and only 'adding capacity'to plumbing and what not for the lower 10 floors, which would house smaller units, would be economically viable. Although actual luxury market requires high ceiling so probably wouldn't work out.

I'm sure many many people have thought of all sort of solutions as the value for finding some sort of solution is extremely high.

mothballed•23m ago

Yes I have seen many viable solutions. Usually a bunch of people in what are effectively SRO / living offices above and down below there are a couple bathrooms and big kitchen at the ground floor where it's easiest to alter the plumbing and electric. Residents don't have personal bathrooms/kitchens.

I used to hit the rave scene a lot in Chicago so I came to find out these situations were extremely common in warehouse districts and work excellent. Consider a homeless person can shower and shit with 5 gallons of water and use the local laundromat to wash their clothes, and this is like luxury compared to that; even a single 3 inch drain pipe can handle 10+ gallons per minute and at the bare minimum any building with plumbing has one of those on each floor. It's really a total non-issue so long as the people living there are willing to break the law, it works beautifully compared to not having the additional housing units.

For reference -- before our well was connected and I hauled water-- we used about 60 gallons per week for an entire family and that was plenty enough to shower, cook, and flush the toilet all week. That would consume at most 6 minutes of pipe time in the absolute smallest pipe you would ever find servicing a floor of an office, with utilization at 0.4%.

vel0city•1h ago

Another thing about a lot of commercial buildings is the floorplate size and layout. Office buildings often don't care if there's a lot of interior spaces without any windows, but people need outside light. So if you've got a massive floorplate it can be kind of a pain chopping it up into good sized units that meet the demand of the residential market in the area. This definitely varies from building to building though.

There's also a lot of work that probably needs to go in to the ventilation and fire code changes. An office building isn't designed for people having ovens and stoves. It also often just assumes its OK to have less isolation between units for the ventilation, or previously entire floors were considered to be one space ventilation-wise but now you might be trying to split it into 2-3 units that require separation. This separation can also complicate things like AC and heat.

The ventilation issue comes up a good bit with a lot of these poorly done conversions. You end up with units that just don't get nearly enough airflow, and all the windows are sealed so its not like one can just open the window to get more air.

helterskelter•1h ago

This is an issue that got brought up in Portland, OR during Covid IIRC. The city was looking at buying up vacant offices and converting them to living space but it just didn't make any sense financially and the city concluded it was cheaper to demolish and rebuild than convert.

xnx•45m ago

They've figured out some ways to do it (December 2025): https://www.wsj.com/real-estate/commercial/nyc-office-reside...

wing-_-nuts•19m ago

>at some point that it's more expensive to convert these into residential buildings than it is to literally demolish and rebuild.

Yep, and that's fine. It's literally a tangible instance of 'creative destruction'. I see people arguing that oh, we have to RTO to save the current model and it seems so backwards to me.

justinhj•1h ago

Historically we did this with suddenly unused industrial buildings in cities. Liverpool and London's Dockland warehouses, New Yorks lofts in lower Manhattan.

When it is suggested today modern planners and developers say it can't be done. What changed?

nickdothutton•1h ago

Regulations. I have some small experience with this, although I'm not a professional developer. The regulations for residential properties, whether built for purpose or converted, make this very difficult (and therefore costly) in the UK and I presume other countries.

zdragnar•1h ago

Industrial buildings tend to be much easier to renovate, because they're filled with big open spaces.

Commercial office buildings are optimized for seating space, so you get a lot more interior walls already built and often shorter ceilings then industrial spaces. That's a lot more renovation to add in all the necessary plumbing for showers and toilets and often laundry in every unit.

New building codes mean that everything has to be done right to today's standards, not yesteryear's, so it becomes cheaper to demolish and rebuild than retrofit, especially if the building has a lot of interior space that doesn't have access to exterior walls for mandated windows.

mooreds•1h ago

This podcast is about the NYC market, but a good deep dive into why this is not a simple proposition.

https://www.youtube.com/watch?v=HNkLcD3PKyk

46493168•58m ago

And yet Boston is doing it.

https://www.boston.gov/news/officials-celebrate-first-100-un...

pseudalopex•20m ago

rbanffy said a lot of vacant offices could be converted. Boston's mayor said 780 units were planned.

elnatro•1h ago

Well but is the demand for office space in Denver so high?

lux-lux-lux•1h ago

It would be higher if the rents dropped, but despite the massive oversupply that doesn’t seem to be happening.

‘Just build more’ YIMBY types should take note of this, though I’m afraid I don’t know what the solution is.

zeroonetwothree•1h ago

Our evidence from a wide range of cities is that those that build more housing have lower rent growth. Actual decreases are unusual though.

mixmastamyk•56m ago

Inflationary policy continues to exist, also it is rare to have a true overabundance of housing. But places like Detroit show prices can go down in the right conditions.

Commercial leases have their own quirks and long timelines that encourage waiting on a better price. Perhaps a tax on vacant commercial units.

liquidise•56m ago

Lived in Denver for the last 15 years and own a company. You couldnt pay me to have office space in Denver simply by virtue of i'd rather spend commuting time doing something more fun. This applies to just about everyone i know here as well. Many come to Denver for the outdoors and the activities, commutes cut into that time.

mattcantstop•1h ago

I think Denver (I live here) is an example of our horrible zoning. We have entirely focused our cities (especially Denver and RTD (Regional Transportation District)) around people commuting in for work.

This is one of the main principles of BAD design, where you create an entire area around close to a single use (offices). That creates a very fragile city. This "single use" zoning that the US proliferated makes us really fragile to changes like working from home vs in-office work.

Another point is that cities are rather hostile for families. We create cities so they need to be fled as soon as people have kids. We have streets entirely of concrete and 1 and 2 bedroom apartments. If we want cities to be more resilient we need to rethink them. We need streets that have greenspace as a fundamental part of the infrastructure. We need permeable surfaces.

I went to Park am Gleisdreieck in Berlin and stayed in a multi-family unit right along the park. There were tons of families with kids playing in the park, people riding bikes for transportation along the park bike paths, adults playing ping pong on outdoor tables together. It was wonderful. It made me rethink what a city can look like.

Denver needs to take notes. We don't need a single use city and a light rail system that only goes into that city. We made an incredibly fragile city. We can build better cities.

Glyptodon•1h ago

Denver does have some neighborhoods that almost are good in some of the respects you mention, or at least I remember some development that seemed similar in the vicinity of the Millennium Bridge - it's just insanely expensive (and I'm remembering pre-pandemic times).

renewiltord•1h ago

What size of home would you be willing to raise your children in? The average 3 br is 1000 sq. ft. in Berlin.

US norms are for much larger homes.

estearum•1h ago

Square footage matters less than configuration.

jmward01•51m ago

And location. While going to school my family lived in a 2 bedroom that was, I think, just under 600 square feet. The fridge was in the living area. The kitchen was a space so small you could touch every surface/cabinet if you stood in the middle of it. But we were right in the middle of amazing services. A park was a 3 minute walk away. My first class was visible from my bedroom window as was the shared play area of the apartments around me so I could let my 6yo 'go to the park' and play but still watch him if I wanted to. All the shopping was local and actual businesses that did actual things were in walking distance. We had many friends that lived/worked/played/shopped all within walking distance and that tiny apartment didn't feel small at all because the real living room was the city.

fwip•1h ago

I grew up (as the oldest of 5 siblings) in a split-level home about 1200 sqft. It was fine, we just shared bedrooms. Based only on anecdotal evidence, we grew up closer than other families I knew where each kid has their own bed and bathroom.

renewiltord•59m ago

So did I. But I think the median American acts to not raise their child like that.

citrin_ru•54m ago

A typical 3 bedroom flat/house in the UK has similar area. IMHO in terms of house sizes the US (with large houses) is an outlier, not Berlin.

wing-_-nuts•47m ago

As someone who lives in a 700 sq ft 1bd apartment, I guess maybe you could pack in another two bedrooms in with 300 more sq ft (my bedroom is ~ 120-130 sqft w ~ 25 sqft of closet space). You wouldn't have a whole lot of elbow room. Still makes more sense than the 2500+ sqft monstrosities we regularly build in the states.

mixmastamyk•1h ago

Yup. Every time I hear someone complaining online about a lack of parking I think, this person has never been to Europe, or even Washington, DC.

If you’ve never seen anything but stroads and power lines, I guess it makes sense.

bigstrat2003•1h ago

I also live in Denver. The biggest problem with downtown isn't zoning (though that may be a part), it's the homeless people. Who's going to want to go hang out on 16th when there's a dude asking you for money on every street corner? I don't know what the solution is, but it seems clear to me that revitalizing downtown starts with removing the "I'm going to have to deal with vagrants" factor.

coderc•56m ago

When I worked off of 16th street, years ago, many of those homeless people had jobs with the Denver VOICE, selling newspapers. I even bought a few. Are they still around?

mixmastamyk•52m ago

Solution, 1) abundance of cheap housing. 2) effective mental health treatment with mandatory attendance when necessary.

Of course this utopia would attract folks from other areas, so can’t be solved only locally. Needs national support.

mw1•42m ago

The only solution is to provide stable long-term housing and social support. Most else has been tried, but it doesn’t seem that you can punish people and make them less poor. Cops continue to sweep through and steal their belongings, but that clearly won’t solve the problem, and hasn’t. You can throw them all in jail, but that’s more expensive than providing non-jailed housing and rehabilitation services. You can forcefully or enticingly move them along with cops or free bus tickets, but that just shifts the problem elsewhere temporarily. As long as we continue to decide to solve this by increasing funds for cops above all other services in a city, this is the result we will get.

browningstreet•59m ago

> I went to Park am Gleisdreieck in Berlin and stayed in a multi-family unit right along the park

That's a favorite running spot of mine when I'm in Berlin. It's also along a great bus line, close to gyms, a technology museum, a bio market, Victoria Park and not far from Tempelhof. But that little park shines on its own. And the cars parked along the road are down a half level so you don't feel surrounded by parked cars.

That's a pet peeve of mine in America, and especially the American west. We put outdoor seating for cafes and restaurants along busy streets or busy parking lots. Which downgrades the outdoor experience and supports the car priority mindset.

jmward01•58m ago

Everything is part of an ecosystem, even office buildings. Nature shows us that a healthy ecosystem, one that survives shocks, is a diverse ecosystem. Diverse ecosystems find niches faster and niches grow over time to turn into major driving forces. They absorb shocks as new things enter since not all parts react the same or on the same timeline. Diversity is key to long term health. This is why monopolies are bad, this is why we should be looking for every kind of diversity we can in every problem. I have gotten to the point that when I see large scale problems I start looking for where the diversity is low and that is almost always the issue. Politics bad? Maybe if we had more than two choices things would be better. Housing bad? Maybe if we had more mixed use things would be better. Energy segment issues? Look at how fast the energy segment is improving now that renewables have finally been added to the ecosystem and we have more choices. Etc, etc etc.

f1shy•50m ago

Everything has pros and cons. I lived in both setups, and the mixed residential/commertial/recreational can be very noisy. Also big parks, if not well illuminated, become unsafe for the families around.

wing-_-nuts•21m ago

>mixed residential/commertial/recreational can be very noisy.

I'd rather live in a somewhat 'noisy' vibrant neighborhood where I can walk to shops or restaurants than an absolutely dead residential cul-de-sac where I have to literally drive miles to the nearest amenity. If the noise bothers you at night, get a sound machine or install triple pane windows.

I understand having industrial separate from everything else, but commercial and residential should always be blended IMHO, and SFH zoning should not exist.

I would kill for reformed zoning standards like they have in Japan.

xnx•43m ago

> I think Denver (I live here) is an example of our horrible zoning.

I don't think urban planners will ever admit or apologize for the damage they've done.

renewiltord•1h ago

Denver is an interesting place. The Democratic Socialists of America managed to lobby to protect a golf course to prevent housing from going in there. Sort of an inversion from what you’d expect.

burkaman•1h ago

I think opposing housing was a mistake, but just to add some context, the result of this was that the city purchased the land and made it a public park (https://www.denvergov.org/Government/Agencies-Departments-Of...).

samschooler•1h ago

* now is spending 70 million of public funds to make it a park https://denverite.com/2025/11/05/park-hill-park-bond-funding...

burkaman•1h ago

Well it is already open as a park, but yes they are spending a lot of money to make it nicer I guess.

samschooler•49m ago

To call it a park is a stretch. It's a dilapidated golf course, and last I checked it can't be open over night because of liability? Like I'm happy it's open, but I would say it's a far cry from being on the same level as Cheeseman or City :/

samschooler•1h ago

That whole situation was bad. I don't think anyone is happy with that situation. A developer was going to give us (some) affordable housing, and a "free" park. Instead now we're paying 70 million for the same park.

renewiltord•1h ago

In a POSIWID sense, American socialism’s purpose is to prevent affordable housing and create parks. Indistinguishable from what rich neighbors of a plot of land would like, coincidentally.

burkaman•52m ago

The purpose of a system is what it does, but here you're saying that the purpose of [American socialism] is what [the Denver DSA] does.

renewiltord•36m ago

Interestingly, many DSA chapters follow the same playbook so the Denver DSA is fairly representative of the DSA, which is the largest socialist organization in the US. So either the DSA is not socialist, not representative of American socialists, or is representative and American socialists are a device to stop affordable housing and create parks.

Which proposition or conclusion above do you disagree with and why?

lux-lux-lux•1h ago

That ‘golf course’ was unused land protected by a conservation easement. There were other options for housing development.

bethekidyouwant•57m ago

Why not the conserve the land outside of cities where people want to live?

burkaman•36m ago

Based on what I know about Denver, people there want to live outside the city, not in Denver itself. Everyone I know that moved to "Denver" actually moved somewhere like an hour's drive from downtown, and not because they couldn't afford something in the city. Here's a map of average housing prices in the area: https://www.arcgis.com/apps/dashboards/3e87d9f631dd470ab05ab.... There are some expensive neighborhoods in the city, but I think this map looks very different from most other American cities.

asdff•56m ago

There is so much buildable land in denver it makes no sense to start burning the furniture to keep the place warm

AnimalMuppet•1h ago

They've got a graph of vacancy rates going back to 2023. But I'm wondering about longer term. Does anyone have data going back to, say, the 1980s?

(Why the 1980s? Because I go back that far. I have some sense of what the business cycle was doing during those times. I'd like to know if this is really historically unusual, or just a blip, possibly a COVID-related one.)

armenarmen•57m ago

Downtown Denver also kind of just sucks. A couple good restaurants sure, but 16th street mall (recently rebranded as “16th St. The Denver Way”) is comparable to City Center in SF.

Whenever friends move here I say “don’t live downtown” and inevitably they do and they hate it.

samschooler•46m ago

16 St. is way better than it was. If you haven't been down there, go walk around at lunch sometime, there are a bunch of normies down there now. Yeah its all chains still, but it's not actively hostile like it was a few years ago.

wing-_-nuts•15m ago

Ok, sounds like normal 'creative destruction' to me. Time to raze useless office space and build housing in it's place.

Also, I don't get how companies can make such a big song and dance about their climate commitments on the one hand while simultaneously insisting on RTO on the other. The greenest commute is one that never happens. If the tax code needs to change to give companies credit for their employees cutting out their commute, so be it.

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