Denver’s office market is showing signs of recovery heading into 2025, according to a new report from commercial real estate firm CBRE.

The office market has struggled since the pandemic due to the rise of remote and hybrid work and vacancies rapidly rose since 2020, especially in downtown.

While the Denver metro’s vacancy rates stayed about the same at 25%, other aspects of the market saw improvements at the end of 2024 as more companies are starting to bring their employees back into the office.

“Overall, the market’s outlook remains cautiously optimistic with signs of positive economic momentum in 2025,” according to the quarterly CBRE report released Friday.

Companies leased more office space in the metro Denver area than vacated it in the fourth quarter of 2024 for the second time in the last two years. Total net absorption — which measures whether companies are wanting more real estate than getting rid of it — was positive with 167,000 square feet absorbed, “a considerable turnaround” after many negative quarters.

The action in the last quarter was driven by several large deals. Apple delivered its 125,000-square-foot project by Boulder’s FlatIron Parkway and Central Avenue. The River North Arts District (RiNo) scored a 77,000-square-foot lease from law firm Davis Graham & Stubbs – to the cost of downtown Denver where the firm downsized to RiNo from its downtown office of 111,000 square feet.

Leasing activity was up nearly 5% year-over-year, according to the quarterly report. The technology industry was the main contributor to leasing in the Denver metro area.

Though the average vacancy rate barely budged, the report said the rise in vacancies is slowing down — and that’s a good sign, too.

“More occupancy and leasing in new construction, coupled with slowing deliveries, will bring some relief as the market begins to shift toward declining vacancy in 2025,” according to the report.

Some neighborhoods have seen vacancies start to drop. RiNo – which has the highest vacancy rate in the region due to the recent surge of new office construction — fell from nearly 50% earlier in the year to 46%. Boulder’s fell 2% in the last quarter.

Downtown Denver’s vacancy rate increased nearly 1% at the end of the year.

Though it seems the office markets problems are stabilizing, the report said it’s not completely out of the water yet.

Many office building owners could still potentially face loan defaults and foreclosures — especially those already struggling with low occupancies.

And there’s more buyer activity now, but deals are happening at lower values.