- 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.
- 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.
- 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.
- 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.
- 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.