The Denver Regional Council of Governments (DRCOG) Board of Directors convened on December 18, 2024, to discuss key economic indicators affecting the region, particularly focusing on office and retail vacancy rates, as well as trends in multiunit residential construction.

The meeting began with a presentation on office vacancies, highlighting data from CoStar, a real estate data firm. It was noted that office vacancy rates in the region have reached just shy of 15%, a significant figure but not unprecedented compared to the peak of the recession in 2009, when rates were between 10% and 15%. However, the central business district is experiencing a much higher vacancy rate of approximately 24.5%. This increase has been attributed to the rise of telework, as employers are reducing their demand for office space due to flexible work arrangements.

The discussion then shifted to retail vacancy rates, which have also seen fluctuations. In 2009, retail vacancies ranged from 5% to 10%. Following a slight increase during the pandemic, the retail sector has rebounded more quickly than the office market, with current rates around 8.5% in the central business district. This trend is understood to be linked to the higher office vacancy rates downtown, as retail businesses often rely on foot traffic from office workers.

Lastly, the board examined trends in multiunit residential construction. Despite the prevalence of telework and changing living preferences, the region continues to see growth in housing construction. While rents remain high when adjusted for inflation, they are considered to be within normal ranges. The board expressed optimism that the housing sector has not been adversely affected by the shift towards remote work.

In conclusion, the meeting underscored the ongoing impacts of telework on the regional economy, particularly in the office and retail sectors, while also highlighting a resilient housing market that continues to grow amidst these changes. The board plans to monitor these trends closely as they develop.