The Denver area office market continues in a two-year slump, with office vacancy rates high, rental rates decreasing, and few new businesses to expand into the empty spaces. More than one-fifth of the office space is empty or for rent, with a vacancy rate of 21.8%. The average rental rates have dropped to $17.16 per square foot from a high of $20.79 in 2000. (Denver Post, June 27, 2003).
Warehouse vacancy rates are at 7%, up from 5.4% at the end of 2001, prompting landlords to aggressively cut deals to find and keep tenants. Although the asking price is $9 per square foot, 25 to 30% discounts are common. (Denver Post, June 27, 2003).
In Boulder County, higher commercial property taxes are increasing the rent payments for many businesses and raising landlord concerns about retaining tenants in an already depressed economy. Taxing authorities are driving up the mill levies and landlords typically pass on the cost of higher taxes to their tenants. As a result, businesses may be forced to consolidate if they have multiple locations, or move elsewhere. (Boulder County Business Report, June 13-26, 2003).
