Denver Industrial Market Report Q4 2021
The industrial market is humming along for landlords, developers and investors. Tenants are leasing industrial space at a record pace, and even with a booming supply pipeline, vacancies have compressed in recent quarters. From the viewpoint of tenants, rents have never been higher and many are finding themselves with little negotiating power to reduce rates.
Companies have placed a growing importance on maintaining or expanding their supply chains. But Denver's geographically isolated location can be a challenge to distributors competing with Amazon to deliver their products at unprecedented speeds. To meet the demands of consumers throughout Colorado's densest population cluster, distributors are ramping up operations in the Mile High City to be closer to their customers. In addition to Amazon, Alan Ritchey, Aspen Distribution, and Planterra Foods were among industrial tenants taking on large space commitments in the metro in the last year.
Investors are willing to pay top dollar for newly delivered industrial product even without a tenant in place, allowing the buyer to capitalize on current market demand while avoiding potential construction risks brought on by supply chain issues.