2018 Q4 Denver Industrial Market Report

Market Overview

Denver’s industrial sector finished 2018 just like it began – on a high note. Strong positive net absorption, record-breaking investment activity, and continued development are all indications of Metro Denver’s strong industrial sector. Investment activity totaled more than $1.3 billion during 2018, the highest annual total on record, as the market experienced an increased appetite from institutional buyers looking to invest in Denver’s industrial asset class. While some economists are predicting a market correction, many commercial real estate professionals in Denver are enthusiastic about the upcoming year, and expect the market to continue on its current trajectory. Denver’s population growth, diversified economy, and regional location remain fundamental in the overall attraction to the region. Therefore, expect demand for Denver’s largest commercial real estate sector to persist throughout 2019.

Highlighted Trends

• Metro deliveries totaled approximately 1.2 million square feet during Q4.
• 12 out of 15 submarkets realized positive net absorption.
• Fourth quarter industrial investment activity totaled approximately $311 million with an average sales price per square foot of $100.
• Unemployment rate in Metro Denver currently sits at 3.3 percent – national unemployment is 3.7 percent.
• The December 2018 Manufacturing ISM Report on Business stated that economic activity in the manufacturing sector expanded and grew for the 116th consecutive month, with a slight decrease in the PMI of 5.2 percentage points since November 2018.