Denver industrial market report
Denver continues to be an important logistics hub for the Rocky Mountain states, with 26 Amazon distribution facilities in the area. The region is also evolving into a hub for biotech, aerospace and clean energy innovations. Developers are increasingly building larger projects with speculative construction and large distribution facilities the most common. Southwest DIA continues to be the most sought-after submarket, spilling over to the northeast corridor and continuing north up I-25 to Longmont and Mead.
Denver, Boulder, Fort Collins and Greeley collectively have 239 msf of industrial inventory. With over 13 million sf of industrial product under construction in the region, the first 3 quarters of 2022 saw 7 million sf delivered, which accounts for 3% of the total inventory and more than typically delivered historically.
In the first three quarters of 2022, the region has seen over 5.9 msf of positive net absorption and companies such as Kroger, Dollar General, Whole Foods and PepsiCo have all announced expanding their operations in Denver during the third quarter.
Direct asking rent
Asking rental rates continue their steady growth and have risen 10% year-over-year.
Both direct and sublease availabilities escalated marginally during the third quarter after remaining constant throughout 2021.
Trending downward the last year, vacancy also slightly increased from the previous quarter due to recent increase in inventory delivered and tenants experiencing longer build-out periods.
After an increase in asset values in Q2, current industrial sales are pricing similar to this time last year.
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