Denver industrial market report
Q1 2024
Denver's industrial market maintains its upward trajectory from 2023. There continues to be a growing demand for small to medium-sized spaces, with transactions under 50,000 square feet comprising 1.8 million square feet of total volume. While vacancy has risen to 8.0%, largely due to the introduction of 12.3 million square feet of new inventory over the past year, sustained leasing activity is expected to mitigate occupancy declines. Additionally, the deceleration in construction starts will further aid in the absorption of newly available properties.
Denver industrial continues to exhibit strong leasing activity
Since the beginning of the year, 2.6 million square feet (msf) of industrial space has been leased, with notable occupancies including Kratos (112,000 sf) and Leanin’ Tree (109,676 sf).
Overall vacancy rises triggered by the delivery of new product
Over the past year, vacancy rates have increased by 140 basis points to reach 8.0%, driven by a slowdown in absorption and the influx of 12.3 million square feet of new space added to the inventory.
Construction starts slow year-over-year
Construction starts have decelerated by 45.2% compared to the previous year, with the larger projects (500k–750ksf) witnessing an even steeper decline of 72.8%. This slowdown can be attributed to the influx of new inventory delivered, along with elevated construction costs and interest rates.
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