The North Central Expressway Sub-Market has seen a remarkable decrease in the Direct Class A vacancy from 17.3% at the end of third quarter 2015 to 12.4% at the end of the third quarter 2016. Average full-service rental rates of Class A space increased per square foot, from $27.67 to $29.30 during the same timeframe. Class A direct net absorption is currently at 37,268 square feet quarter to date. Meanwhile, Direct Class B vacancy has decreased by .6% since the third quarter of 2015 from 8.7% to 8.1% with full-service rental rates increasing from $23.12 per square foot to $24.81 per square foot. Direct net absorption in Class B space is negative at 9,444 square feet for this quarter.
Class A properties along the Dallas North Tollway remain full, hovering around a record-low 12% vacancy rate. We did however see a correction in Class A property rental rates, that decreased $.33 cents per square foot to settle at $29.02 at the end of the third quarter. We do not anticipate much, if any rental rate increases in the coming months. We are of the opinion that the rental rates for Class A product have topped out, and will likely decrease as companies like Fannie Mae and JP Morgan prepare to relocate to Plano.
The LBJ Corridor is one of the last remaining safe havens for companies that are seeking rent relief. With submarkets like Central Expressway and the Lower Tollway experiencing 10-12% vacancy rates, the East LBJ Corridor has a vacancy rate of just below 25%. We expect this to change drastically in 2017 with companies fleeing surrounding submarkets for the best valued office space in the entire DFW-Metroplex.
At the end of the third quarter of 2016, the flex market averaged a $8.87 psf triple-net rental rate, which is a significant increase from the third quarter average rental rate in 2015 of $8.07 psf triple-net. The vacancy rate for the second quarter of 2016 sits at 7.0%.
The Denver office market experience an upward tick in vacancy for the first time in 6 quarters during the third quarter of 2016. CoStar reported the third quarter vacancy rate at 9.6%. It was also reported that rental rates decreased slightly to $24.94 in Q3 2016 from a reported $25.11 the previous quarter. Net absorption for the overall Denver office market was a negative (29,698) comparing to a positive 754,222 square feet at the end of Q2, and a positive 722,380 square feet in Q1 2016.