Compared to the office and retail sectors, the COVID-19 shutdowns have had less of a negative impact on the industrial and manufacturing sector due to the fact many industrial tenants are considered essential and more likely to stay open during shutdowns. Like much of the country, Denver's job recovery has slowed, but still outpacing the national average, showing Denver as a stable performer compared to the rest of the country.
Vacancy rates are above average for Denver at 6.1 percent and things are looking more optimistic in Denver's industrial markets with 6 million square feet (SF) of deliveries and another 6.2 million SF currently under construction. The new square feet hitting the market contribute to a higher vacancy rate. Even though current rents are near record highs, the annual pace of rent growth has slowed to 1.1 percent. Note this is still positive growth in this period of pandemic, but far from previous annual peak rent growth rates of over 7 percent. The largest lease of 2020 was more than 700,000 SF from Amazon; the largest of Q4 was Victory Packaging at 200,000 SF.
Low interest rates and longer fixed-term loans are helping users and investors take advantage of building asset purchases.
For questions and inquiries, you may contact Tanner Mason at Benchmark Commercial, firstname.lastname@example.org, (303) 395-0112, or Ellory Read, email@example.com, (303) 395-0114. Download Benchmark Commercial's Year-End 2020 Report for additional information on the Denver industrial market.