After several years of high sublease activity, Denver’s office market is showing signs of stabilization. According to Cushman & Wakefield’s Q3 2025 Denver Office MarketBeat, total sublease availability in Metro Denver in Q3 2025 declined by 2.5% from Q2 and 5.4% year-over-year. While overall vacancy remains high at 26%, this represents a meaningful slowdown in sublease listings since 2022. The slowdown reflects a combination of expiring leases, direct leases replacing sublet space, and a modest return of corporate office demand.
Nationally, similar patterns are emerging. Microsoft’s recent decision to pull approximately 480,000 square feet off the sublease market near its Redmond, Washington, campus after implementing a stricter in-office work policy highlights a potential reversal among large tenants.[1] Similar mandates at Amazon, Google, and Salesforce, reflect a broad reassessment of workplace strategy that could ripple through markets like Denver.
For Denver landlords, this shift presents an opportunity to refine lease provisions that define who truly controls the space when corporate needs shift.
- Recapture Rights. Recapture rights remain one of the most effective tools for landlords managing sublease requests. By maintaining the ability to reclaim all or part of the space proposed for sublease, landlords can re-lease directly to a new tenant at current market rates, protect overall building value, and prevent below-market sublease deals from setting unfavorable comparables.
- Renewal Options. Landlords should structure renewal options to ensure they are personal to the original tenant and do not automatically transfer to a subtenant or assignee without landlord’s consent. As tenants sublease or reorganize portions of their space, these renewal clauses can become points of contention. Limiting renewal rights to the original tenant allows landlords to reassess creditworthiness, market rent, and space utilization before committing to another term.
- Early Termination. Landlords should take a close look at early termination provisions. As hybrid work policies continue to evolve, tenants increasingly request termination flexibility, but these clauses must be drafted with precision. Clear notice periods, termination fees, and restoration requirements help ensure that landlords are compensated for lost rent and that returned premises are in marketable condition.
Collectively, these three provisions can significantly influence a landlord’s ability to manage risk and capture upside in a changing leasing environment. As Denver’s office market moves from contraction toward gradual stabilization, landlords who approach lease negotiations with this strategic mindset will be better positioned to protect asset value and respond quickly to the next market shift.
[1] https://www.costar.com/article/1777421789/microsoft-pulls-sublease-listings-as-it-ramps-up-office-requirements
