Understanding why Lower Downtown Denver dramatically outperforms the broader downtown office market.
The LoDo Outperformance Story
While downtown Denver’s overall office vacancy rate hovers near 37%, Lower Downtown (LoDo) tells a markedly different story. With vacancy rates around 19.4%, LoDo has maintained occupancy levels nearly 18 percentage points better than the broader downtown market. This dramatic outperformance reflects the unique characteristics that make LoDo Denver’s most resilient downtown office submarket.
Understanding why LoDo works when other downtown areas struggle provides valuable insights for investors and tenants evaluating Denver office opportunities.
What Sets LoDo Apart
Union Station and Transit Access
Union Station serves as the hub of Denver’s regional transit system, connecting LoDo to the entire metro area and Denver International Airport via the A Line commuter rail. For employees who rely on public transportation or prefer to avoid driving, LoDo offers unmatched accessibility. This transit advantage has become increasingly important as companies seek to accommodate diverse commuting preferences.
Walkability and Amenities
LoDo offers the most walkable office environment in downtown Denver. Within a short walk of any LoDo office building, employees have access to dozens of restaurants, coffee shops, bars, and retail establishments. The historic character of the neighborhood, with its brick buildings and pedestrian-friendly streets, creates an environment that feels different from the corporate towers of the central business district.
Historic Character and Building Quality
Many LoDo office buildings occupy historic structures that have been renovated for modern use. These buildings offer architectural character, high ceilings, large windows, and the authenticity that many tenants seek. The limited inventory of such buildings creates scarcity value that supports occupancy and rents.
Entertainment and Sports Proximity
LoDo’s proximity to Coors Field (Colorado Rockies), Ball Arena (Denver Nuggets and Colorado Avalanche), and Empower Field at Mile High (Denver Broncos) creates a unique energy in the neighborhood. While this primarily benefits retail and hospitality, it also contributes to LoDo’s identity as Denver’s most vibrant downtown district.
Market Fundamentals
| Metric | LoDo | Downtown Overall |
| Vacancy Rate | ~19.4% | ~37% |
| Class A Asking Rent | $40-50/SF | $32-42/SF |
| Cap Rate Range | 6.50-8.00% | 7.50-12.00% |
| Trend | Stable to improving | Challenged |
Source: CoStar, SVN Denver Commercial, CBRE Denver Office Figures Q4 2025, Cushman & Wakefield MarketBeat
Tenant Profile
LoDo attracts a diverse tenant base that values the neighborhood’s unique characteristics:
Technology companies: Tech firms appreciate LoDo’s creative energy and the ability to offer employees a vibrant work environment with easy access to restaurants and after-work activities.
Professional services: Law firms, accounting firms, and consulting companies value LoDo’s accessibility and prestige while maintaining proximity to courthouse facilities and other downtown institutions.
Creative agencies: Marketing, advertising, and design firms find that LoDo’s aesthetic aligns with their brand identities and helps attract creative talent.
Financial services: Investment firms and wealth management companies appreciate LoDo’s combination of professional credibility and lifestyle amenities for client entertainment.
Investment Considerations
Why LoDo Commands Premium Pricing
LoDo office buildings trade at significantly tighter cap rates than other downtown Denver assets. This premium reflects lower vacancy risk, stronger tenant demand, and limited supply of comparable product. Investors pay more for LoDo assets but receive greater stability and downside protection in return.
Limited Supply Advantage
LoDo’s historic character and zoning constraints limit new office development. Unlike areas where developers can add supply in response to demand, LoDo’s inventory is essentially fixed. This supply constraint supports long-term rent growth and occupancy stability for existing buildings.
Potential Risks
While LoDo outperforms other downtown submarkets, it is not immune to broader market pressures. Continued hybrid work adoption could reduce tenant space requirements over time. Economic downturns affecting LoDo’s technology and professional services tenant base could impact demand. Premium pricing means there is less margin for error in underwriting.
Comparison with Other Downtown Submarkets
LoDo’s 19% vacancy compares favorably to other downtown Denver submarkets:
Upper Downtown/CBD: 40-46% vacancy. Older Class B/C towers struggle with obsolescence and flight to quality.
Central Business District: ~37% vacancy. Mixed performance depending on building quality and amenities.
Ballpark/Platte: ~25-30% vacancy. Transitional area benefiting from proximity to LoDo and RiNo.
2026 Outlook
LoDo’s outlook for 2026 remains positive relative to other downtown Denver submarkets. The factors that have driven LoDo’s outperformance—transit access, walkability, character, and limited supply—will continue to differentiate the submarket. Return-to-office trends should benefit LoDo as companies seek high-quality environments to entice employees back.
Key factors to watch include the health of LoDo’s technology and professional services tenant base, broader downtown Denver revitalization efforts that could improve perceptions of the entire downtown area, and any significant changes to transit service that could affect LoDo’s accessibility advantage.
Bottom Line
LoDo demonstrates that location fundamentals still matter in office real estate. While broader downtown Denver struggles with vacancy exceeding 37%, LoDo’s combination of transit access, walkability, historic character, and vibrant street life has maintained occupancy at levels nearly 18 percentage points better. For investors, LoDo offers relative safety within a challenged downtown market. For tenants, LoDo provides the best of urban office environments in Denver.
About SVN Denver Commercial
SVN Denver Commercial specializes in LoDo office investment and tenant representation. Contact us to explore Lower Downtown Denver office opportunities.