The Collier’s Q4 Metro Denver reports highlight trends and key statistics for the market segment using proprietary data and research. The report seeks to inform clients of the previous quarter’s absorption, vacancy, delivery, construction, rental, and sales activity in order to allow a deeper breadth of knowledge into Denver’s rapidly growing industrial market.
2019 Industrial highlights include bullish development with nearly 7 million square feet of new product being delivered and an additional 6.3 million square feet under construction. Strong demand decreased overall vacancy rates by 10 basis points during Q4 to 5.2% with overall vacancy expected to remain in the low fives throughout 2020. Throughout 2019, lease rates increased by 6.2% to an average rate of $9.45/SF NNN.
Metro Denver’s strong influx in new residents and job growth continue to poise its office market for success. 2019 highlights include over 1.5 million square feet of new product delivered and over 2 million square feet being absorbed, dropping the overall vacancy rate 50 basis points to 10.7%. The additional demand and unprecedented investment liquidity have increased lease rates and the average sales prices by 36% and 72.8%, respectively. With strong net migration, positive job growth and plenty of liquidity remaining, 2020 is primed for another great year.
Metro Denver’s robust net migration and job growth continue to poise its multifamily market for growth. Throughout 2019, nearly 7,000 units were absorbed and average rental rates increased 2.7%. The average sales price per unit increased by a staggering 6.9% to an average of $256M per unit. While over 20,000 new units remain under construction, the influx of new residents is expected to keep vacancy rates between 5% and 6% throughout 2020.
Net migration and job growth outpaced the nation for the tenth consecutive year and fueled Denver’s robust growth. However, the metro area was not immune from the record setting year of national store closings and the overall vacancy rate finished the year at 6.4%, with net absorption coming in negative at just under 630,000 square feet. Several new projects are under construction that will provide more destination retail opportunities Downtown, but the bulk of new retail growth is occurring in areas around Denver International Airport, Castle Rock and Erie.
All of this combined represents the strong market growth that has occurred over the past decade and sets a positive tone for the CRE industry moving forward in Denver in 2020.
