Denver Medical Office Market Update: Fall 2026

Written By Stephen Strecker

If you own a dental, medical, therapy or specialty practice in the Denver metro, you have probably read that office space is everywhere and landlords are desperate. That is true for some buildings. It is not true for the space most practices need. Here is what the latest numbers say, and what to do about them if your lease ends in 2027 or 2028.

Key takeaways

  • Metro Denver medical outpatient direct vacancy was 5.3% in the first half of 2026, per CBRE, while total Denver office vacancy was 28.7% in Q2 2026.

  • Average direct asking rent for medical space dipped 3.7% from year-end 2025 to $32.68 per square foot full-service gross, but quality space is still limited.

  • Only one medical building remained in CBRE's Denver development pipeline as of mid-2026, so new supply will not open up many options soon.

  • If your lease ends in 2027, start comparing options now. Twelve to eighteen months is a realistic runway for a medical relocation or a well-negotiated renewal.

Two office markets, two different stories

Denver's general office market is still working through a lot of empty space. CBRE reported total Denver office vacancy of 28.7% in Q2 2026, even as leasing picked up to 1.7 million square feet, the market's strongest quarter since early 2022. In the south metro corridor from the Denver Tech Center to Lone Tree, CoStar data cited by Axios showed roughly 19% of office space vacant in Q1 2026.

Medical space is a different picture. CBRE's Denver medical outpatient building report for the first half of 2026 shows:

  • Direct vacancy of 5.3%, down 40 basis points from year-end 2025.

  • 298,000 square feet of positive net absorption in the first half of 2026, more than any full year since 2022.

  • Two projects totaling 237,000 square feet delivered in the first half, the largest half-year delivery total in more than five years.

  • AdventHealth's 88,000-square-foot Aurora Highlands project as the only property left in the development pipeline.

For context, CBRE's national medical outpatient vacancy was 9.8% in Q2 2026. Denver's medical market is tighter than the country's.

What is driving demand along the Front Range

Health systems are still building closer to where patients live, especially in the south metro. UCHealth opened Pavilion 2, a 130,000-square-foot specialty, surgical and outpatient building, at its Highlands Ranch campus on August 31, 2026, and says a second hospital tower with 70 inpatient beds is expected this fall. In Castle Rock, AdventHealth broke ground in October 2025 on a 23,622-square-foot emergency, urgent care and primary care building at Crystal Valley Parkway and Plum Creek Boulevard, with opening expected in fall 2026.

Investors are noticing too. In September 2025, Remedy Medical Properties and Kayne Anderson Real Estate bought three south Denver medical office buildings: 630 and 640 Plaza Drive in Highlands Ranch (nearly 90% leased) and Mineral Medical Plaza in Littleton (more than 90% leased). Well-located medical buildings are mostly full, and their owners know it.

For independent practices in Highlands Ranch, Lone Tree, Castle Rock, Parker and Aurora, this means referral sources and patient traffic are growing, and so is competition for the same second-generation medical suites.


What this means for your lease

Rents dipped, but do not mistake that for leverage everywhere

CBRE's average direct asking rent for Denver medical space fell 3.7% from year-end 2025 to $32.68 per square foot full-service gross. An average blends very different buildings. A dated suite with little plumbing can sit while a built-out dental or exam-room suite near a hospital campus leases quickly. Before you treat the dip as a discount, look at what is available in your size range and submarket.

Know how your rent is quoted

The CBRE figure is full-service gross, which bundles operating expenses into the rent. Many Colorado medical leases are quoted triple net, with taxes, insurance and common area costs billed on top. Comparing a gross number to a net number is one of the most common mistakes we see. Our guide to net vs. gross leases walks through the difference.

General office conversions are an option, with homework

With general office vacancy high, some practices are looking at converting standard office suites. That can work for therapy, behavioral health, consult-heavy specialties and some primary care. For dental, imaging or procedure rooms, check plumbing access, floor loads, HVAC capacity and the building's medical-use rules before you fall in love with a rate. Build-out budgets for medical uses are much higher than for standard office, so the lower rent has to make up for the extra construction.

A timeline that works for 2027 and 2028 expirations

  • 18 months out: Pull your lease and note renewal option deadlines, notice dates and any relocation or expansion rights. Decide what the practice needs to look like in five years.

  • 12 to 15 months out: Tour real alternatives in your submarket. Even if you plan to stay, knowing your options is what gives a renewal conversation weight.

  • 9 to 12 months out: Request proposals, compare total occupancy cost (not just base rent), and negotiate improvement dollars.

  • 6 to 9 months out: Sign. A relocation needs design, permitting and construction time after that.

If you are leaning toward staying put, our posts on maximizing savings in a medical practice lease renewal and renewal concessions cover the negotiation side.

How we can help

Every practice's situation is a little different: your patient base, your build-out, your growth plans, and where you want to be in ten years. If your lease ends in the next two years, we would be glad to sit down, review it with you and show you what the market looks like for your size and submarket. You can learn more about our medical real estate services in Colorado, or book a free consultation and bring your lease.

Frequently asked questions

Is medical office space hard to find in Denver right now?

In many submarkets, yes. CBRE reported metro Denver medical outpatient direct vacancy of 5.3% in the first half of 2026, far below general office vacancy. Built-out medical suites near hospital campuses tend to lease fastest.

How much does medical office space cost to lease in Denver?

CBRE's average direct asking rent for Denver medical outpatient space was $32.68 per square foot full-service gross in H1 2026. Actual rent depends on location, building age, condition of the suite and whether the lease is gross or triple net.

When should I start looking if my medical office lease ends in 2027?

Start 12 to 18 months before expiration. That leaves time to compare alternatives, negotiate a renewal with real options in hand, or design and permit a new space if you relocate.

Can I convert regular office space into a medical office?

Often, depending on the use. Therapy, behavioral health and consult-based practices convert more easily. Dental, imaging and procedure uses need plumbing, power, HVAC and building approvals that should be checked before you sign.

This article is general information, not legal, tax or financial advice. Market figures come from the third-party sources listed below and can change. Talk with your attorney, CPA or lender about your specific situation.

Sources


Stephen Strecker
Next

AI and Technology in Healthcare: What It Means for the Future of Medical Real Estate