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Denver Five Fast Industrial Facts

Cara Stamp • 7/18/2023
The Denver Metro industrial construction pipeline continues to thin as speculative development slows and new construction deliveries create a slight uptick in vacancy in Q2 2023. 
  1. Construction Pipeline Continues to Thin as Speculative Development Slows 
    Q2 2023 recorded 1.5 msf in deliveries and only 289,800 sf on new construction starts, bringing the under-construction total to approximately 8.5 msf. The volume of new speculative development is expected to taper off significantly over the next several quarters. 

  2. Leasing Activity Experiences Strongest Quarter Since Q1 2022 
    After three consecutive quarters of decreased activity, the Denver market recorded 4.3 msf in leasing volume in Q2 2023, a 100.5% increase compared to Q1 2023. 

  3. Delayed Move-ins Finally Commence, Giving Absorption a Boost 
    Following quarters of decreased absorption figures due to material shortages and build-out delays, Q2 2023 benefitted from several deferred move-ins, resulting in 1.2 msf of net absorption. 

  4. Investors and Lenders Remain Selective, Leading to Decreased Sales Activity 
    Due to the rising interest rates and the subsequent cost of debt, investment activity remained comparatively light, with just under $104.0 million in investment sales in Q2 2023. 

  5. Slight Uptick in Vacancy Due to New Speculative Construction 
    With 1.5 msf in new deliveries, 83.9% of which remains available, vacancy increased by 20 basis points QOQ on both a direct and overall basis to end Q2 2023 at 6.6% and 6.9%, respectively. 


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