Denver, CO– Avison Young recently released both its First Quarter 2022 Office and Industrial Market Reports for Denver. While the collective navigates mixed national economic signals such as historically low jobless claims or increased inflationary pressures, the business landscape in Denver remains diversified and steady. Generally speaking, Avison Young found that the tech sector accounted for 20% of the office leasing activity this quarter while on the industrial front, we are seeing growth primarily in the life science, medical manufacturing, and aerospace sectors.

Diving deeper into the office sector, it continues to face challenges as overall vacancy rates increased 5.5% since the first quarter of 2020.

“In my conversations with our various stakeholders across multiple industries, it’s evident that return to office remains a key factor to maintain business continuity and overall company culture. Many businesses that invested in remote work appear to be keeping an eye toward smaller, more efficient options including move-in-ready and spec suites,” commented Marcy Moneypenny, Managing Director – Denver with Avison Young.

She added, “Ultimately, companies continue to analyze their portfolio’s risk, while tenants are filtering through ample opportunities for space. Highly amenitized office product in desirable locations are outperforming the market.”

Last but certainly not least, Denver’s industrial sector is bursting at the seams with 14 million square feet currently under construction comprised of 63 projects. Within the top 20 largest developments, 50% is preleased. The market saw 8.1 million square feet of new industrial space deliver in 2021, which is 2 million more than the previous year.

The greatest net absorption is occurring in the northeast submarket near Denver International Airport (DIA), which offers large swaths of development land and access to a major distribution channel along I-70. This March, Microsoft invested $63 million in the DIA submarket when they purchased 260 acres. Other notable companies expanding in the area include Costco, Walmart, Ryder, Shamrock Foods, Subaru and Amazon.

Across the metro area, industrial rents have risen 8.1% in the past 12 months and yet still offer a significant discount relative to competing markets in the west.

View Denver office market report (Q1 2022)

View Denver industrial market report (Q1 2022)