The metro Denver region saw office vacancies hit nearly 24% in the second quarter, according to a report from commercial real estate firm CBRE released Tuesday.

It’s up from 23.5% in the first quarter of 2024.

Despite the rising number of empty offices in the region since the pandemic hit, Denver’s commercial real estate market saw one important metric improve.

Total net absorption — a measurement calculating whether companies are wanting more real estate or getting rid of it — was positive for the first time in more than two years.

If absorption is positive, it means more companies are leasing office space than vacating. The last time the Denver metro area’s total net absorption was positive was in the first quarter of 2022.

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Denver’s office market — specifically downtown — has seen an exodus of office workers in the wake of the pandemic as remote and hybrid work became more popular and companies cut costs by downsizing. Vacancy rates soared as office lease renewals came up. 

Much of the positive absorption was driven by new office buildings in various parts of the region that opened with low vacancy rates, CBRE said.

Total net absorption was 261,000 square feet in the second quarter, according to the report, a “considerable improvement” from the nearly negative half-million square feet absorption in the first quarter of the year.

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But downtown Denver, where most of the region’s office buildings are concentrated, is still seeing negative absorption and climbing vacancies.

Downtown vacancies hit nearly 34%, up about 2% from Q1, and the area had a negative 74,000 square feet of absorption — the highest in the region.

A 700,000-square-foot building downtown on 1900 Lawrence Street finished construction during the second quarter and was completely empty upon completion, the report said, leading to a spike in Class A office building vacancies. The building’s only pre-committed tenant isn’t expected to move into its space until 2025.

Construction of new office space declined “significantly” in Q2, according to CBRE.

The region has 627,000 square feet of office real estate under construction, down 61% from the last quarter, as seven buildings wrapped up development.

Longmont (7%), Cherry Creek (10%) and Southwest Denver (14%) had the lowest vacancy rates in the metro region. River North (49%) and Downtown (34%) had the highest rates.