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Market Report

Denver Industrial

Second Half 2019

Land Availability Around Airport Boosts Market Outlook; Deal Flow Headlined by Large-Volume Sales

 

Construction hits cyclical high amid whirlwind of demand drivers. Denver’s industrial market continues to gain prominence as strong population growth in the metro and along the Colorado Front Range heightens the need for companies to set up operations in the area. Additionally, strong growth in e-commerce, last-mile delivery and warehousing industry tenancy is still outpacing historically high development. These factors will encourage builders to remain active, finalizing 6.2 million square feet in 2019 — the highest delivery volume in more than a decade. The Peña Boulevard corridor and the area just southwest of Denver International Airport — some of the metro’s fastest-growing industrial submarkets — will collectively receive almost half of the market’s total completions. Proximity to the airport, railways and major thoroughfares make this spot attractive to many builders, although this area’s vacancy will remain elevated in the coming months until demand catches up to supply. Developers are also staying active in northeast Denver this year, adding 640,000 square feet in the I-25 North Mousetrap and I-76 corridors. Incremental waves of development in this area have put pressure on the submarket’s vacancy rate, dramatically moving it different directions over the past several years.

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