The Denver industrial market closed the second quarter with the highest average asking rental rates on record across all industrial product types. Tenant demand remains steady as the pipeline continues to churn out new product. Absorption recorded a strong rebound, while continued tenant buildout delays ensure strong figures through the end of the year as already-planned occupancies move in. The table is set for a strong second half for Denver industrial product.
Denver’s office market has experienced ongoing struggles in the first half of 2023, with vacancy rates remaining at near-record highs. The rise in sublease space indicates that vacancy will continue to increase in the future. This suggests that employers are grappling with the decision of returning to the office, as the hybrid work model appears to have become a permanent fixture. Companies are likely to face significant challenges before fully embracing a return to the office, as they come to realize the inefficiencies of hybrid work.
The Denver retail market is making a remarkable recovery from the pandemic, having experienced eight consecutive quarters of positive absorption. Although asking rates are steadily increasing, investor activity has slowed down at the beginning of the year. However, we anticipate a boost in investor and tenant confidence in the future, which will further strengthen an already thriving and resilient market.