6 ms·
Downtown Denver's office vacancy rate grows to 38.2%
- rbanffy 10mo agoLooks like there is an opportunity to convert a lot of that into residential space.
- shagie 10mo agoNot 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-conversions.html?unlocked_article_code=1.GVA.fhAA.rn4RQmfFrLUg&smid=url-share https://www.nytimes.com/interactive/2023/03/11/upshot/office...
- deleted 10mo ago[deleted]
- toomuchtodo 10mo agoWhile 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-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-vacancy-rate-record-high-downsizing-company.html 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_vacancy_rates_20192025/ https://old.reddit.com/r/charts/comments/1p8mhmq/us_office_v...
- dnemmers 10mo agoGreat article with diagrams and overlays. Good share.
- xnx 10mo agoArticle 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-residential-conversions-housing-4723b702 https://www.wsj.com/real-estate/commercial/nyc-office-reside...
- palmotea 10mo agoIIRC, that article mentioned older buildings tend to be more convertible to residential, because of their layouts, and modern office buildings (with giant open floor spaces for seas of cubicles) are almost impossible to convert. There should probably building code changes to ban the latter type of office building, and keep the space more flexible and convertible to residential. A big plus is the resulting office space would probably be nicer to workers.
- someuser54541 10mo agoI 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 10mo agoI 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 10mo agoThe 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 10mo agoThere'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 10mo agoFor 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.
- justinhj 10mo agoHistorically 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 10mo agoRegulations. 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 10mo agoIndustrial 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.
- pseudalopex 10mo agoWhat modern planners and developers say is converting modern office buildings isn't cost effective often. Warehouses cost less to convert than high rise buildings. Most old buildings do not have large areas without natural light or ventilation.
- mooreds 10mo agoThis 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 https://www.youtube.com/watch?v=HNkLcD3PKyk
- 46493168 10mo agoAnd yet Boston is doing it. https://www.boston.gov/news/officials-celebrate-first-100-units-converted-offices-now-under-construction-boston https://www.boston.gov/news/officials-celebrate-first-100-un...
- pseudalopex 10mo agorbanffy said a lot of vacant offices could be converted. Boston's mayor said 780 units were planned.
- elnatro 10mo agoWell but is the demand for office space in Denver so high?
- lux-lux-lux 10mo agoIt 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 10mo agoOur evidence from a wide range of cities is that those that build more housing have lower rent growth. Actual decreases are unusual though.
- mixmastamyk 10mo agoInflationary 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.
- Izikiel43 10mo ago> Detroit show prices can go down in the right conditions. Those right conditions for rent going down are the wrong conditions for everything else.
- mixmastamyk 10mo agoYes, meant to quote the word "right."
- liquidise 10mo agoLived 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 10mo agoI 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 10mo agoDenver 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 10mo agoWhat 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 10mo agoSquare footage matters less than configuration.
- renewiltord 10mo ago[flagged]
- burkaman 10mo agoI 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-Offices/Agencies-Departments-Offices-Directory/Parks-Recreation/Planning-Design-Construction-Community-Engagement/Park-Facility-Projects/Park-Hill-Park https://www.denvergov.org/Government/Agencies-Departments-Of...).
- samschooler 10mo 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/ https://denverite.com/2025/11/05/park-hill-park-bond-funding...
- burkaman 10mo agoWell it is already open as a park, but yes they are spending a lot of money to make it nicer I guess.
- samschooler 10mo agoTo 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 10mo agoThat 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.
- AnimalMuppet 10mo agoThey'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 10mo agoDowntown 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 10mo ago16 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 10mo agoOk, 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.
- cal_dent 10mo agoPlaying devil's advocate a little bit (only just), but razing buildings will not do much for climate commitments either
- wing-_-nuts 10mo agoReplacing unused office space with dense multifamily housing would benefit the climate long term as city dwellers have a much lower carbon footprint. Not to mention that they've gotten good enough building with engineered timber that they can safely build midrises with the stuff. No need for concrete.
- cal_dent 10mo agobut by demolishing you're releasing and generating a ton of embodied carbon for a likely relative limited output of residential homes on the other side (because the economics doesn't stack up). I'd contend that the trade off is as simple as you're suggesting.
- wing-_-nuts 10mo agoRazing buildings generates no more carbon than what is required by the machinery to demolish it and cart off the debris. I'm starting to question whether you're speaking in good faith
- cal_dent 10mo ago
- puppycodes 10mo agoImagine if rent and housing costs were reflected the vacancy rate. I never really understood the economics of leaving spaces empty and not hemorrhaging money. My guess would be its a game of large numbers where private equity can own large swaths of properties and can afford to keep them vacant by controlling the market through manufactured scarcity? Is it like the diamond market?
- red-iron-pine 10mo agothey're playing the long game and it's better to hold and not hold. plus keep rents high and the handful of folks that really need it will pay it. several cities get around this by having under-utilization taxes -- e.g. slap an extra 30% on any property in X neighborhoods that are empty or otherwise cannot prove 50% occupancy