Denvers Industrial Real Estate Is On Fire

Dated: 05/01/2014

Views: 787

 Metro Denver's industrial-space landlords are smiling after a strong Q1 that looks to continue in 2014, according to CBRE Group Inc.'s latest MarketView report.

Vacancy rates stood at 4.6 percent in the quarter, down 0.4 percent from a year earlier, the report said. And lease prices are finally climbing towards pre-recession levels, with Q1 rates up 9 cents from the previous quarter, to $6.19 a square foot.
Tenants leased 177,000 more square feet than was vacated in the first quarter, the 16th consecutive quarter of positive net absorption. And there's 3.1 million square feet of new industrial space under development in the area to help meet the demand.
“We’re seeing local, regional and national companies all expanding here,” said Mike Camp, senior vice president and industrial specialist with CBRE.
Much of the growth is along Interstate 70, including projects under construction by San Francisco-based Prologis Inc. and  Minneapolis-based United Properties as well as one at Majestic Commerce Center in Aurora. 
“Notably, Q1 2014 saw further speculative development break ground as tenant demand strengthened across the market,” the report said.
One speculative project includes a 66,350-square-foot flex research and development building at 1900 Cherry at the Colorado Technology Center in Louisville. 
The highest lease rates were logged in Boulder at $9.41 per square foot, with the lowest average coming in at $3.88 in the north metro submarket. 
The lowest vacancy rate, as always, was central Denver at 1 percent (there’s only 13.5 million leaseable square feet), and Longmont recorded the highest average vacancy rate at 17.5 percent.
“Industries driving tenant demand remained consistent with food production and distribution, construction and third-party logistics leading the way,” the report states. Vacancy rates should continue to decline the rest of the year “even with the surplus of construction activity.”
As far as investment activity, “Denver firmly rooted itself on national investors’ radar in 2013 and 2014 [and] should continue to see elevated activity,” the report states.
Buyers grabbed 1.1 million square feet of industrial space in Q1, far exceeding the 395,000 square feet that reached the closing table in Q1 2013. That “drove down cap rates notably, to pre-recession levels.”
The biggest sale of the quarter was the purchase by Newport Beach, Calif.-headquartered TA Associates Realty of an 18-building portfolio that included more than 900,000 square feet of industrial space for $36.9 million, or $40.80 per square foot, from seller Invesco Realty Advisors of Dallas.
Denver Colorado Realtor -Michael Steffen 
Michael is a motivated realtor specializing with investors and new home buyers located in the following areas; DenverArvada Aurora Bennett Byers Castle Pines Castle Rock Centennial Cherry Hills Village Columbine Valley Deer Trail Denver Elbert Englewood Franktown Greenwood Village Highlands Ranch Larkspur Littleton Lone Tree Parker Sedalia Sheridan Strasburg WatkinsWheat Ridge, Lakewood, Castle Rock, Thornton, Westminster, Evergreen, Golden. Michael Steffen 
Blog author image

Michael Steffen

My name is Michael Ross Steffen. I’m an Exit Realty Cherry Creek Agent in the Denver metro area. I specialize in advanced marketing, buying, selling and investing for seasoned, as well as first time....

Want to Advertise on this Site?

Latest Blog Posts

6 Things To Know When You Relocate To Denver

Denver has so much to offer and the world is on to all the greatness Denver provides to families, singles, young, old, internationals, and a variety of industries and demographics.  Here are

Read More

Beautiful Knolls West Townhome

7106 S Knolls WayCentennial, CO 80122Knolls West Townhomes SouthGlennFantastic townhome! Clean and inviting in highly desirable location, popular Knolls West Townhome Community! Walking &

Read More

HUTCHINSON HEIGHTS Open House

Bring your rackets! You must see this large, beautifully maintained home that backs to a park with public tennis courts! Aurora's Hutchinson Heights neighborhood is centrally located,

Read More

What Is APR Or ARMS Quick Explanation

The annual percentage rate (or APR) is the amount of interest on your total loan amount that you'll pay annually (averaged over the full term of the loan). A lower APR could translate to lower

Read More