Denver Industrial Figures Q1 2025

The first quarter of 2025 saw total net absorption come in at positive 531,000 sq. ft., shrinking slightly from the previous quarter but surpassing the amount seen in Q1 2024 by 9.9%. Historically, the beginning of the year has experienced a sluggish start, as Q1 absorption is the lowest quarterly total in nine of the previous 10 years.

The construction pipeline resumed its decline this quarter as 864,000 sq. ft. delivered across six buildings, while three projects spanning 397,000 sq. ft. commenced. All ground-breakings this quarter were on a speculative basis and located within the Airport submarket. Total vacancy increased 10 basis points (bps) quarter-over-quarter due to delayed tenant build-outs and smaller speculative deliveries, despite 77.7% of completions this quarter being build-to-suits or preleased. Sublease availability in the market only increased by 69,000 sq. ft. in Q1 2025 but has risen 16.9% year-over-year.

Leasing activity declined 13.0% quarter-over-quarter, totaling 2.7 million sq. ft. Renewals accounted for 59.0% of activity as more tenants elected to remain in place compared to last quarter when renewals accounted for 50.0%. Investment sales volume decreased 40.9% quarter-over-quarter to $381 million but marked a 43.2% increase compared to Q1 2024. Q1 investment sales volume was down in part due to sellers focusing on putting their properties on the market before the presidential election which created very little supply in early 2025.