U ptick in demand. Rental rate growth. Long-term lease commitments. Reduced availability. These are not the phrases that have been most consistently associated with office assets over the last few years. However, these trends are applicable to Class A and recently developed office properties nationally and in the Denver mar- ket. While office occupiers are adopt- ing defensive strategies to combat macroeconomic pressures, ten- ants are moving beyond a “kick the can” strategy and into data-driven decision-making mode as evi- denced by an 8% increase in Den- ver's office leasing volume from 2021 to 2022. Occupiers view their office space as a tool for recruitment and a differentiator as they establish their return-to- office policies. As a result, tenant activity has been concentrated in the market's new- est and most amenitized properties, with 85% of last year's leases over 25,000 square feet in downtown Denver signed in new construction or Class A assets. n What does this type of concentrat- ed activity mean for Denver office sup- ply and demand going forward? High- quality office buildings continue to defy broader market conditions amid flight-to-quality dynamics. In downtown Denver, 81% of the stock was built before 2010. Asset vin- tage has become a differentiator in the market, with the vacancy rate of inventory developed between 2010 and 2020 sitting at 12% as of fourth-quarter 2022, markedly lower than the overall downtown aver- age of 22%. As leasing momentum improves, tenants seeking high- quality space will face increas- ing scarcity of available options. Additionally, as a result of rising construction and financing costs, the pipeline of new development is expected to decline. Currently, there is only 1.7 million sf of space under construction across downtown Denver, all of which is expected to deliver by the end of 2024 with no other near-term projects proposed beyond that. This pipeline of sup- ply is more moderate than previous cycles with a very shallow pipeline of proposed projects, while draw- ing the most tenant demand in the market. As deliveries outpace new ground- breakings, tenant activity in new INSIDE Adaptability required PAGE 10 Companies are driving changes, forming symbiotic relationships with owners. March 2023 PAGE 12 PAGES 19 Navigate defaults The post-pandemic reality is coming to a head for property owners across the country. High quality Site work is underway on Opus Group's 316-acre Sun Empire site. Please see Market Update, Page 6 State of office: Class A assets defy broader market conditions Hilary Barnett Senior director, JLL Capital Markets Steel House’s industrial biophilic design, by Morris Adjmi and Open Studio Architecture, wraps around the largest elevated private park in RiNo.