Denver's skyline looks the same as it did last month, but don't let the cranes fool you. Things are getting weird. Honestly, if you're looking at Denver commercial real estate news today, you’re seeing a market that’s basically bifurcating into "the haves" and "the absolute have-nots."
We’ve officially hit that point in 2026 where the post-pandemic dust hasn't just settled—it’s hardened into a concrete reality.
Downtown is currently a tale of two cities. On one hand, you’ve got the shiny, glass-clad towers in LoDo near Union Station that are doing just fine. On the other, the "Upper Downtown" central business district is grappling with a 37.7% vacancy rate. That's not just a stat; it’s a crisis for some and a once-in-a-generation fire sale for others.
The $100 Million Gamble on "Big Empty Shells"
There's this developer, The Luzzatto Co., and they're becoming the main character of the Denver commercial real estate news today cycle. They recently snatched up enough square footage to equal the size of Empower Field.
We're talking about massive towers at 633 and 621 17th St. Their plan? It’s called "High Fidelity." They want to take these aging, "distressed" office blocks and turn them into 1,200 residential units.
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It's a gutsy move.
Converting a 1970s office building into apartments isn't like a weekend DIY project. You’ve got to figure out how to get natural light into deep floor plates and plumb 200 toilets where there used to be two. But with the city’s Downtown Development Authority (DDA) dangling $165 million in grants for these types of conversions, the math is starting to work.
What’s actually selling?
- The Apartment Boom: While office space struggles, multifamily is still moving. A Parker apartment complex just sold for nearly $100 million.
- Industrial Tightening: Big-box warehouses are actually seeing vacancies drop into the single digits.
- The Retail Resilience: Neighborhood-serving shops are thriving. People still need to buy groceries and grab a beer at places like the Pub on Pearl in Wash Park, which was recently bought by the founder of Dry Dock Brewing for $2.5 million.
Why the Tech Center is Hurting (Sorta)
You'd think the Denver Tech Center (DTC) would be immune, but it's feeling the squeeze too. Recently, a major loan for the Landmark Corporate Center was sent to special servicing. That's industry-speak for "the owner might not be able to pay the bills."
When a big tech firm leaves, the hole they leave behind is massive.
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But here’s the kicker: while the old office buildings in DTC are sweating, new residential projects like Araceli DTC are opening their doors to high demand. People want to live there; they just don't necessarily want to work in a cubicle there for 40 hours a week.
The Death of the "Standard" Lease
Tenants have all the leverage right now, and they know it.
I was looking at the recent lease for HDR, the engineering firm. They just moved 500 employees within downtown, but they didn't just take more of the same. They moved into 74,000 square feet of brand-new, high-end space.
It’s called "flight to quality." Basically, if an office building doesn't have a gym, a meditation room, or at least a really nice roof deck, it’s invisible to top-tier tenants. Even big law firms like Morrison Foerster are staying downtown but cutting their footprint. They’re trading quantity for quality.
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Real Numbers You Should Care About
If you're trying to make sense of the Denver commercial real estate news today, look at the spread in rents.
Class A office space in top-tier submarkets like Cherry Creek is actually seeing rent growth of up to 5%. Meanwhile, the older Class B and C buildings are dropping prices and offering massive "concessions"—like six months of free rent or huge build-out budgets—just to keep the lights on.
The industrial side is a different beast entirely. Median asking rates are hovering around $12 per square foot, and listings aren't sitting on the market nearly as long as office spaces, which can linger for 200+ days.
What Happens Next?
The 16th Street Mall renovation is finally wrapping up, and the city is desperately hoping that more foot traffic will save the ground-floor retail.
Is downtown dead? Former Governor Hickenlooper doesn't think so, and neither do the investors buying buildings at 80% discounts. We're seeing a shift from a "Central Business District" to a "Central Neighborhood District."
Actionable Next Steps for Investors and Tenants
- Watch the DDA Grants: If you're into redevelopment, the city still has hundreds of millions earmarked for office-to-residential conversions over the next decade.
- Negotiate Hard on Office: If you're a tenant looking for Class B space, you have the upper hand. Don't just ask for lower rent; ask for "TI" (Tenant Improvement) dollars to customize the space.
- Industrial is the Safe Bet: With supply tightening and the "flight to quality" hitting warehouses too, well-located industrial assets remain the most resilient part of the Denver portfolio right now.
- Monitor the Fed: With interest rates finally starting to ease as of early 2026, the cost of financing these massive conversion projects is getting slightly more digestible, which could trigger a wave of new construction starts by summer.
The market isn't failing; it's just evolving into something much more residential and high-end. The days of the boring, mid-block office tower are probably over for good.