Submarket Snapshot_4Q2023_Office_Interactive

OFFICE 4Q23 SUBMARKET SNAPSHOT BOULDER

KEY TAKEAWAYS

4Q23 LEASING & ABSORPTION

Leasing activity increased by 44.8% QOQ to 96,300 sf, with East Boulder being responsible for a majority of the activity in the submarket. Dicerna Pharmaceutical secured the largest lease of the fourth quarter 2023 with a deal at 4780 Pearl East Circle for 41,500 sf. Net absorption in Boulder recorded 20,700 in positive absorption, marking a huge improvement QOQ, which previously marked a 12-quarter record low of 203,000 in negative net absorption. Direct asking rates saw slight growth, as rates for all building classes increased by $0.11 psf QOQ to $38.89 psf. However, Class A direct asking rates decreased by a notable $2.08 psf QOQ to $45.59 psf. Three buildings totaling 369,500 sf remain under construction as of 4Q 2023, one of which is expected to deliver by early next year. There are currently two projects in the proposed development pipeline, but with the rising cost of capital, it is unclear when this project will break ground.

41,500 4Q23 LARGEST LEASE 22,400 4Q23 LARGEST MOVE-OUT

20,700 4Q23 ABSORPTION 96,300 4Q23 LEASING ACTIVITY

2023 INVESTMENT ACTIVITY

ASKING RENTS

TOTAL SALES TRANSACTION

LARGEST SALES TRANSACTION

AVERAGE CAP RATE

LEASING & ABSORPTION ACTIVITY

AVG. DIRECT RENTS—FSG $38.89 (ALL CLASSES) AVG. DIRECT RENTS—FSG $45.59 ( CLASS A )

Q4 2023 QOQ CHANGE

250,000

150,000

DIRECT VACANCY (ALL CLASSES)

16.7%

20 bps

50,000

CLASS A VACANCY CLASS B VACANCY

-50,000

18.5%

130 bps

-150,000

16.3%

120 bps

AVG. DIRECT RENTS—FSG

-250,000

$35.55 (CLASS B)

SUBLEASE AVAILABILITY

5.0%

20 bps

Leasing Activity Net Absorption