Denver Industrial Market Report

Northern reaches warrant attention. Denver’s industrial vacancy rate reached its highest point in more than a decade in June; however, the market’s recent performance provides reason for optimism. During the first half of 2024, vacancy rose by 40 basis points, a mild adjustment when compared to its regional counterparts of Phoenix and Las Vegas, which logged spikes of 170 and 300 basis points, respectively. Demand in one section of Denver is largely to credit for the comparative stability. Accounting for 22 percent of total stock, North, North Central and Northeast Denver collectively noted an 80-basis-point decline in vacancy over the first half, with tenants absorbing a net of 940,000 square feet. With deliveries slated to be minimal through 2025, demand for existing space could improve, ushering in further vacancy compression across these areas. Locally discounted rents in demand. The performance of the metro’s largest submarket by stock is also promising. As of June, East I-70-Montbello had a 6 percent vacancy rate, a metric 100 basis points below its long-term average. The area’s mean asking rent, which is $2.45 to $5.30 per square foot less than the metro’s six other largest areas, as well as its proximity to Denver International Airport and a major interstate are attracting cost-conscious tenants. These fundamentals, however, could be impacted by the submarket’s sizable pipeline of proposed projects. More than 9.0 million of the 13.4 million square feet planned metrowide is located here.