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Q3, 2019
PREPARED BYBrandon Langiewicz,Partner
OUR NETWORK IS YOUR EDGE.
All information is from sources deemed reliable and is subject to errors,omissions, change of price, rental, prior sale, and withdrawal without notice. Prospect should carefully verify each item of information contained herein.
Hoff & Leigh | 2700 S Broadway #307 | Denver, CO 80113 | 720.572.5187 office www.hoffleigh.com/denver
INDUSTRIAL MARKET REPORT
Denver, CO
INDUSTRIAL MARKET REPORT
Market Key Statistics 2
Leasing 3
Rent 8
Construction 10
Under Construction Properties 12
Sales 14
Sales Past 12 Months 15
Economy 17
Market Submarkets 19
Supply & Demand Trends 23
Rent & Vacancy 25
Sale Trends 27
10/7/2019Copyrighted report licensed to Hoff & Leigh, Inc. - 408800.
Overview
6.8 M 3.7 M 5.2% 3.9%12 Mo Deliveries in SF 12 Mo Net Absorption in SF Vacancy Rate 12 Mo Rent Growth
A confluence of events has resulted in Denver becomingone of the hottest industrial markets in the country.Robust demand in this regional market with a stronglocal economy is stemming from the growth of retailsales, employment, and industrial production in the metroarea and the greater Colorado region. Furthermore, theemergence of the marijuana industry's presence with thepassing of Amendment 64 in November 2012 created anadditional demand driver, with new and relativelyunsophisticated tenants operating with entirely differentprofit margins.
Overall, the market is uniquely strong. Industrial rents arearound 60% above the peak of last cycle, and rentscontinue to grow above the long-term average.However, rent growth continues to contract from thepeak years of this cycle, 2014-15, when the marketposted back-to-back annual gains of more than 9%.
Vacancies remain tight and significantly below thehistorical average, even if they have come off of thehistorically tight conditions that prevailed before recentsupply waves. Well over 5 million SF delivered in 2017,by far the most this cycle, and 3.3 million SF completed
in 2018. More than 4 million SF has come on linethrough August of this year with more than 4.5 million SFremaining in the near-term pipeline.
And the volume of speculative construction has neverbeen higher: The amount of available space at under-construction logistics properties (the warehouse anddistribution industrial subtypes) edged over 3 millionsquare feet in late 2018, twice the year-end 2017amount, and well above an earlier cyclical peak of 2.3million square feet in early 2016. That figure is downslightly this year, as some larger spec projects havedelivered.
Sales volume topped the $1.5 billion mark in 2018, anall-time high, while same-store industrial pricingincreased at an annual rate north of 10% for a fifthconsecutive year. Like many U.S. markets, Denver isexpected to see a moderation in both aforementionedcategories in 2019. It has become increasingly apparentthat more investors are taking a "wait-and-see"approach amid evolving trade tensions, fed rate policies,and global economic and political uncertainty.
KEY INDICATORS
Market RentVacancy RateRBACurrent Quarter Availability RateNet Absorption
SFDeliveries SF
UnderConstruction
$8.975.6%161,982,380Logistics 9.5% (58,590) 0 2,571,337
$10.354.4%49,243,149Specialized Industrial 6.2% (7,345) 0 779,848
$13.424.6%34,163,916Flex 6.8% (30,678) 0 489,966
$9.875.2%245,389,445Market 8.5% (96,613) 0 3,841,151
ForecastAverage
HistoricalAverage
12 MonthAnnual Trends Peak When Trough When
6.1%6.7%1.1%Vacancy Change (YOY) 10.1% 2004 Q2 3.3% 2015 Q3
2,237,5532,077,7893.7 MNet Absorption SF 5,489,406 2014 Q4 (1,825,108) 2003 Q3
3,860,4862,873,5556.8 MDeliveries SF 6,883,456 2019 Q3 130,207 2011 Q4
1.8%2.8%3.9%Rent Growth 9.7% 2015 Q1 -4.7% 2003 Q3
N/A$701.5 M$1.4 BSales Volume $1.5 B 2018 Q4 $215.0 M 2010 Q1
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Leasing
After plummeting to an all-time low of about 5% in mid-2015, the logistics availability rate has steadily trendedupwards, edging over 8% moving into the start of 2019.The uptick in the availability rate largely comes down toincreased levels of speculative development, which byseveral metrics is at cyclical peaks.
Over 80% of the pipeline is logistics space, comprised ofthe warehouse and distribution industrial subtypes. Therewas 3.1 million square-feet of available underconstruction logistics space early in first quarter of 2019,more than twice the year-end 2017 level, and nearly onemillion SF above an earlier 2016 peak. Tenants,particularly those in search of larger spaces have moreoptions (and in more parts of the metro) than they havehad in years.
The flex availability rate was right around 7% at the startof 2019, a new cyclical low. Speculative flexdevelopment remains minimal, and this segment of themarket looks poised for a continuation of tight conditionsin the near-term.
Demand has been concentrated in new big boxinventory, with Amazon leading the way. The ecommercegiant's entry into Denver was likely delayed bydisagreement over collection of state sales taxes. Thefirm began collecting sales taxes in the state in February2016, and opened a new 452,000 SF sortation center inthe Majestic Commercenter prior to the end of 16Q2.
In January 2017, Amazon announced plans to open a 1million SF fulfillment center in Aurora expected to employ1,000 people. That development delivered in September2017, and while it was under construction, Amazonannounced plans to build a highly automated fulfillmentcenter in Thornton on an 850,000 SF footprint. Thebuilding has three stories of usable space via largemezzanines, creating an effective square footage closerto 2.4 million. That fulfillment center opened in October2018.
In another bode of confidence in the Denver Metro,Amazon announced plans in 18Q3 to open up its firstphysical bookstore in the state of Colorado, taking thesole 5,000 SF retail unit in the upcoming Financial Houseoffice development in Cherry Creek.
The marijuana industry has been an important contributorto the industrial market, but the demand impact has beenconcentrated in the light industrial segment. With thepassing of Amendment 64 in November 2012, marijuanabecame legal in Colorado, (recreational sales began atthe start of 2014) and with the prior passing of House Bill1284 medical marijuana dispensaries were required togrow 70% of the product they sell, a threshold manyweren’t meeting before this legislation passed. As aresult, from 2013–15 grow facilities became an importantsource of demand in the market, with estimates of theirfootprint now between three million and four million SF.With caps on the number of producers and sellers, theyare no longer acting as a continued outsized demandcatalyst. These new business operations createddemand for more locally oriented and potentially olderproduct, as evidenced by the extraordinarily tight marketfor smaller warehouses. Grow spaces do not typicallyneed more than 5,000 to 20,000 SF, and low clearheights are not a problem.
The introduction of a new breed of tenants via marijuanalegalization created a demand shock on the order ofabout a 1.5% to 2% increase in occupied space. Whilenot a staggering number, the vast majority of thatdemand occurred in a narrow timeframe, around andbefore the start of commercial sales at the start of 2014.In a market that was already getting tight prior to thestart of 2014 (and where speculative development wouldnot take off in earnest until later in the cycle), this wasenough to squeeze the market to historically tightconditions, an environment where industrial owners hadunprecedented pricing power when leases came to term.
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Leasing
NET ABSORPTION, NET DELIVERIES & VACANCY
VACANCY RATE
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Leasing
AVAILABILITY RATE
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Leasing
12 MONTH NET ABSORPTION SF IN SELECTED BUILDINGS
3rd QtrBuilding Name/Address Submarket Bldg SF Vacant SF
1st Qtr 2nd Qtr 4th Qtr 12 Month
Net Absorption SF
North Denver Ind 855,000 0 0 0 0 0 789,945Amazon
SW DIA/Pena Blvd Ind 353,500 0 0 0 353,500 0 353,500Southern Glazer's
DIA Ind 540,931 189,097 351,834 0 0 0 351,834Nexus at DIA
SW DIA/Pena Blvd Ind 508,428 198,466 0 0 309,962 0 309,962ProLogis Park 70
SW DIA/Pena Blvd Ind 245,847 40,678 0 164,492 (131) 40,808 205,169Eastpark 70 (1)
DIA Ind 266,240 66,626 81,629 0 117,985 0 199,61476 Commerce Center
SW DIA/Pena Blvd Ind 155,775 0 0 155,775 0 0 155,77518245 E 40th Ave
Northwest Denver Ind 145,000 0 145,000 0 0 0 145,0009675 W 108th Cir
SW DIA/Pena Blvd Ind 220,247 75,869 0 0 144,378 0 144,378Eastpark 70 (2)
SW DIA/Pena Blvd Ind 140,040 0 140,040 0 0 0 140,04013100-13300 E 38th Ave
SW DIA/Pena Blvd Ind 278,812 0 139,121 0 0 0 139,12120101 E 36th Dr
SW DIA/Pena Blvd Ind 290,147 66,678 0 0 78,401 50,004 128,405Smith Road Commerce Center
SW DIA/Pena Blvd Ind 199,410 0 0 0 117,283 0 117,28314200 E Moncrieff Place
Commerce City Ind 166,345 66,962 45,066 0 0 54,317 99,383Prologis Park Central
West Denver Ind 104,380 7,195 98,980 1,500 (3,295) 0 97,1855770 McIntyre St
Quebec St Ind 245,340 142,000 0 0 0 0 95,022Airport Industrial Center
Centennial Ind 92,000 0 51,000 0 0 0 88,880HighField Business Park
4,807,442 853,571 1,052,670 321,767 1,118,083 145,129 3,560,496Subtotal Primary Competitors
240,582,003 11,978,715 (23,002) 253,837 (207,604) (241,742) 187,786Remaining Denver Market
245,389,445 12,832,286 1,029,668 575,604 910,479 (96,613) 3,748,282Total Denver Market
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Leasing
TOP INDUSTRIAL LEASES PAST 12 MONTHS
Building Name/Address Submarket Leased SF Tenant Name Tenant Rep Company Leasing Rep CompanyQtr
18701 E 38th Ave SW DIA/Pena Blvd 289,113 Sealy Mattress Manufactu… JLL Newmark Knight FrankQ3 19
20900 E 36th Dr * SW DIA/Pena Blvd 287,148 Whirlpool JLL -Q4 18
19700 E 23rd Ave SW DIA/Pena Blvd 164,492 Bunzl Cushman & Wakefield CBREQ4 18
18245 E 40th Ave SW DIA/Pena Blvd 155,775 New Age Beverages Newmark Knight Frank Unique Properties, Inc.Q1 19
13100-13300 E 38th Ave SW DIA/Pena Blvd 140,040 Rocky Mountain Foods - Michael Bloom Realty…Q1 19
20101 E 36th Dr SW DIA/Pena Blvd 139,121 RK Mechanical Cushman & Wakefield Cushman & WakefieldQ1 19
3155-3199 S Platte River Dr * Lower South Central 135,779 Goodwill - Colliers InternationalQ1 19
13331-13333 E 37th Ave SW DIA/Pena Blvd 126,123 Howard Logistics - Michael Bloom Realty…Q2 19
14200 E Moncrieff Pl SW DIA/Pena Blvd 117,283 Beacon Sales JLL Newmark Knight FrankQ2 19
4650 Steele St Upper North Central 110,562 City and County of Denver - NAI Shames MakovskyQ3 19
11380 Reed Way Broomfield County 107,455 MKS Instruments, Inc. Newmark Knight Frank CBREQ3 19
5151 N Bannock St Northwest Denver 89,498 Sysco JLL -Q4 18
3503 N Windsor Dr SW DIA/Pena Blvd 85,253 Steelcase NAI Shames Makov… Majestic Realty Co.Q3 19
22700 E I-76 Frontage Rd DIA 81,773 Great Plains Moving & St… CBRE Newmark Knight FrankQ4 18
6150 Downing St Commerce City 79,840 Amazon - Cushman & WakefieldQ2 19
12900 E Smith Rd SW DIA/Pena Blvd 78,405 Believe Productions Newmark Knight Frank CBREQ2 19
4555-4685 Geneva St East I-70/270 74,978 - JLL -Q4 18
10432-10498 E 49th Ave East I-70/270 73,625 Bimbo Bakeries - Newmark Knight FrankQ3 19
14550 E 38th Ave * SW DIA/Pena Blvd 70,080 Midwest Floor Coverings Inc Colliers International Cushman & WakefieldQ4 18
19900 E 23rd Ave SW DIA/Pena Blvd 68,510 Benjamin Moore - CBREQ4 18
6770-6880 Brighton Blvd * Commerce City 59,924 SRS Roofing - Newmark Knight FrankQ1 19
14603 E Moncrieff Pl SW DIA/Pena Blvd 57,142 GE Johnson Construction - CBREQ2 19
15755 E 32nd Ave SW DIA/Pena Blvd 54,600 US Venture Inc - -Q4 18
6030 Washington St Commerce City 54,317 CSC ServiceWorks, Inc. CBRE Cushman & WakefieldQ3 19
14501-14551 E Moncrieff Pl SW DIA/Pena Blvd 53,200 Highland Cabinetry - Colliers InternationalQ2 19
14303 E Moncrieff Pl SW DIA/Pena Blvd 52,483 Grand Worldwide Logistics - CBREQ1 19
9650-9690 E 40th Ave * Quebec St 52,235 BSG Craft Brewery - Newmark Knight FrankQ3 19
8447 Highfield Pky Centennial 51,000 - - CBREQ4 18
4780 Vasquez Blvd Upper North Central 50,542 Elite Roofing Supply Lee & Associates | D… NAI Shames MakovskyQ1 19
14402-14492 E 33rd Pl SW DIA/Pena Blvd 50,050 Motion & Flow Products Unique Properties, Inc. Colliers InternationalQ4 18
12900 E Smith Rd SW DIA/Pena Blvd 50,004 - - CBREQ2 19
5775 Broadway Northwest Denver 49,749 - Colliers International Ringsby RealtyQ3 19
6490 E Smith Rd Quebec St 49,500 - - CBREQ1 19
12655 E 42nd Ave SW DIA/Pena Blvd 46,270 Freebird Unique Properties, Inc. CBREQ4 18
21055 Westgate Rd West Denver 46,071 Boulder Botanicals - Newmark Knight FrankQ1 19
6030 Washington St Commerce City 45,066 Gustave A. Larson Comp… CBRE Cushman & WakefieldQ4 18
17801 E 40th Ave SW DIA/Pena Blvd 44,400 Clark Equipment Company Cushman & Wakefield Cushman & WakefieldQ4 18
4525 Ironton St Cent E I-70/Montbello 41,770 Lucy Sky Dispensary - JLLQ2 19
3155-3199 S Platte River Dr Lower South Central 41,627 Goodwill - Colliers InternationalQ4 18
19700 E 23rd Ave SW DIA/Pena Blvd 40,808 Stephen Gould Corporation JLL CBREQ3 19
*Renewal
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Rent
Rents have skyrocketed this cycle: Moving into the startof 2019, rents had eclipsed last cycle's peak by nearly60%, behind only San Francisco and San Josenationally.
Today, conditions are still relatively tight, but developershave stepped on the gas. Supply additions in in 2017and 2018 were more than the prior five years combined.The amount of available under construction space didnot top 2.3 million SF this cycle through year-end 2017,but touched 3.2 million SF in 18Q4 alongside a rush oflarge groundbreaks. As supply has started to catch upwith demand, rent gains remain substantial but havemoderated, at least relative back-to-back escalations ofnearly 10% seen in 2014 and 2015.
Denver's outperformance against the national averagecomes in some part due to marijuana tenants, whichcreated a 1-2% demand shock in an extremely shorttimeframe, just as the market was already approachingcapacity (and before speculative development hadstarted in earnest). But Denver's strength also speaks to
a dynamic and growing local economy. Economic growthhas been trending upward since late 2017 (reversing athree year deceleration), in part due to an improvementin oil prices.
Moreover, Denver acts as the primary distribution hub forother front range metros that are seeing explosive growthin their own right, such as Fort Collins and Greeley,which have seen off-the-charts population and jobgrowth.
On average, logistics demand has soared by just over3% annually since 2012 (about two million SF per-year).Speculative development did not begin to hit the marketin earnest until 2016, and a historically tight marketgranted industrial owners with extraordinary pricingpower. While speculative development has providedsome relief for large- and medium-sized warehouse anddistribution tenants, tenants in search of smaller spacescontinue to face an environment with few options, andowners who will often retain an atypically high amount ofpricing power.
MARKET RENT GROWTH (YOY)
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Rent
MARKET RENT PER SQUARE FOOT
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Construction
Development is at cyclical highs across several metrics.At the start of 2019, over 5 million SF was underway, upfrom a little over 3 million at the end of 2017.
Moreover, the volume of speculative development(virtually all of which is logistics space) has soared tonew heights. There was 3.1. million SF of availableunder construction logistics space early in 2019,following a string of major speculative groundbreaks in2018. This is about one million SF more available underconstruction logistics space than any point in the cycleprior to 2018.
Within this development upswing, two notable trendshave emerged.
First, developers are moving forward with fullyspeculative projects that are larger than what was typicalearlier in the cycle.
Second, major speculative developments are going upoutside of the East I-70/Denver International Airportcorridor, where much of the initial development this cyclewas concentrated.
The shift towards massive, fully speculative projectsbegan in earnest in mid-2017, when Majestic Realtybroke ground on building 15 at its 1,500-acre MajesticCommercecenter. Building 15, a 709,000-square-footdistribution center dubbed the ‘Big Bomber,’ is the largestspeculative logistics development ever constructed inDenver. The building remained fully available shortlyafter its June 2018 completion.
In 18Q3, Prologis broke ground on its largest speculativedevelopment to-date, a 508,000-SF distribution buildingat ProLogis Park 70.
Prologis, whose development this cycle prior to 2018 hadlargely been built-to-suits, separately broke ground onthree fully speculative buildings containing a combined630,000 square feet at a new industrial park calledProLogis Park Central.
Prologis Park Central is in Commerce City, close to the I-25/I-76 intersection. This ties into the second notable
development trend: Developers are moving ahead withprojects along I-25 and I-76—both immediately south ofthe I-25 intersection in Commerce City, and separatelyin far northeast metro Denver near the city of Brighton.With much of the land along the East I-70/DenverInternational Airport spoken for, the I-25 and I-76corridors may offer more-feasible developmentopportunities for new entrants.
In April 2018, Minneapolis-based Hyde Developmentbroke ground on the first 266,000 square-foot building atthe I-76 Commerce Center development in Brighton,located in an enterprise zone. That fully speculativebuilding is the first phase of a planned 1.8 million square-foot industrial park, by far the largest development of thisnature in the Brighton area.
Geographically, development in northern Metro Denverand along the I-76 corridor makes sense. Whilesomewhat further removed from population centers inMetro Denver, immediate proximity to I-25 grants accessto the fastest growing corridor of the Colorado FrontRange. Namely, Metro Denver’s northern suburbs housesome of the fastest growing cities in the metro.
And just north of Metro Denver, growth is robustthroughout the Northern Colorado I-25 corridor. Citieslike Firestone, Erie, and Frederick (just north of MetroDenver in far southwest Weld County) each sawpopulation growth exceeding 22% over the past fiveyears. Vast amounts of open land and significantongoing residential construction prime this part ofColorado for a continuation of outsized growth.
Another nearly untouched part of the metro is about tosee a speculative development: In September 2018,Santa Monica, CA-based Cale Enterprises announcedplans to imminently break ground on two buildings(59,000-SF and 82,000-SF) in Arvada, near theintersection of Ridge Rd and Robb St. The developmentwill be the first larger speculative project in this part ofthe metro in over 15 years, and is expected to completein the third quarter of 2019. The buildings will be divisibledown to about 10,000 SF, a lower threshold than muchof what has been constructed this cycle.
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Construction
DELIVERIES & DEMOLITIONS
SUBMARKET CONSTRUCTION
Average Building Size
RankUnder Constr
Under Construction Inventory
All ExistingSF (000) Pre-Leased SF (000)SubmarketNo. RankBldgs Pre-Leased %
1 SW DIA/Pena Blvd 5 1,008 201,54838.5% 5 93,459388 4
2 DIA 4 910 227,5600% 7 40,5970 2
3 North Denver 3 371 123,6230% 7 35,1800 7
4 West Denver 2 301 150,500100% 1 41,648301 5
5 Centennial 2 265 132,70044.5% 4 38,623118 6
6 Outlying Arapahoe Cty 1 250 250,000100% 1 68,432250 1
7 East I-70/270 1 209 209,0780% 7 43,2260 3
8 Broomfield County 2 188 93,881100% 1 31,768188 8
9 Northwest Denver 2 142 71,0900% 7 26,9710 9
10 Southwest C-470 1 50 50,0001.4% 6 20,9511 10
All Other 5 107 21,37741.8% 23,81845
Totals 28 3,801 135,75533.9% 31,4861,290
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Under Construction Properties
29 3,841,151 1.8% 34.6%Properties Square Feet Percent of Inventory Preleased
UNDER CONSTRUCTION PROPERTIES
UNDER CONSTRUCTION
Property Name/Address Rating Bldg SF Stories Start Complete Developer/Owner
Mar-20192400 E 64th St
Karcher N America380,000 - Dec-2019
SunCap Property Group
Karcher North America, Inc.1
Sep-201922600 E I-76 Frontage Rd
Building 4352,240 1 Apr-2020
Hyde Development
Hyde Development2
Jun-2019112th Avenue & Highway 85
Building D330,250 1 Jul-2020
Brennan Investment Group
Brennan Investment Group3
Jan-201812257 S Wadsworth Blvd
Lockheed Martin266,000 - Apr-2020
-
Lockheed Martin Corporation4
Jan-201823505 E 6th Ave
J.P. Morgan Chase Data…250,000 - Feb-2020
-
JPMorgan Chase & Co.5
Aug-20195303 Havana St
Prologis Park Stapleton…209,078 1 Nov-2020
Prologis, Inc.
Prologis, Inc.6
Mar-201926100-26120 E 68th Ave
JAG Logistics Center at…188,000 1 Feb-2020
J.A. Green Development
J.A. Green Development7
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Under Construction Properties
UNDER CONSTRUCTION
Property Name/Address Rating Bldg SF Stories Start Complete Developer/Owner
Mar-20191910 N Gun Club Rd
163,790 1 Nov-2019Karis Capital LLC
Karis Capital LLC8
Jun-201816205 Sheridan Pky
152,761 3 Nov-2019McWhinney
Broomfield Economic Developme…9
Apr-2019900 E 128th Ave
151,668 1 Nov-2019The Opus Group
The Opus Group10
Sep-2019S Chambers Rd
Building 2147,183 1 Aug-2020
The Opus Group
The Opus Group11
Aug-201913575 E 37th Ave
142,104 1 Jan-2020Karis Capital LLC
AEW Capital Management12
Aug-201818901 E 38th Ave
Tower Business Center…133,848 1 Nov-2019
United Properties
United Properties13
Jun-2019112th Avenue & Highway 85
Building B121,275 1 Jul-2020
Brennan Investment Group
Brennan Investment Group14
Aug-2019S Chambers Rd
118,216 1 Aug-2020The Opus Group
The Opus Group15
May-2019W 144th & I-25
Building 1114,700 1 Mar-2020
United Properties
United Properties16
Jun-2019112th Avenue & Highway 85
Building A106,475 1 Jul-2020
Brennan Investment Group
Brennan Investment Group17
Apr-2019W 144th & I-25
Building 2104,500 1 Mar-2020
United Properties
United Properties18
Aug-2019Ridge Rd & Robb St
Mountain Gateway82,470 1 Jun-2020
Cale Enterprises Llc
City of Wheat Ridge19
Aug-2019Ridge Rd & Robb St
Mountain Gateway59,710 1 Jun-2020
Cale Enterprises Llc
City of Wheat Ridge20
Dec-20185391-5399 S Alkire Cir
Building 5-750,000 1 Dec-2019
Ojala & Company
Ojala & Company21
Dec-20186281 S Racine Cir
40,000 1 Nov-2019-
Smith & Smith Property Ventures,…22
Feb-20192364 Industrial Ln
35,000 - Feb-2020-
-23
Feb-20195495 W 6th Ave
Coated Metals35,000 1 Mar-2020
-
-24
Apr-20195285 Joliet St
Leopold Bros. Malt House30,000 3 Dec-2019
-
Leopold Brothers25
Jul-201918540 Apache Dr
27,753 1 Mar-2020-
-26
Mar-201816302-16392 E 2nd Ave
Norfolk Tech Center, Bui…25,000 1 Nov-2019
Judco Storage Properties
Judco Storage Properties27
Apr-20192275 Manatt Ct
Castle Rock Flex Project12,205 2 Nov-2019
-
-28
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Sales
Around $1.8 billion in industrial sales were recorded inMetro Denver in 2018, eclipsing the previous all-timehigh by 50% Same-store industrial pricing increased bymore than 10% for a sixth straight year in 2018. Cap ratecompression has slowed, but average yields are stilltrending fractionally downwards.
Investment in 2018 was headlined by large multi-property and portfolio deals. This includes New York,NY-based Clarion Partners' March 2018 acquisition of26 industrial properties from Pauls Corporation for $345million. Those properties included 14 (almost two millionSF) in the Denver metro, all located along I-70 near theDenver International Airport. The Denver propertiestraded for an allocated $220 million as part of the largerdeal, representing the largest industrial transaction in themetro's history.
In a notable 18Q2 trade involving recently deliveredlogistics space, J.P. Morgan Investment Managementacquired the four-building 421,000 SF Hub 25 industrialcampus for $74 million, or $176/SF—some of the highestpricing ever recorded in Denver for larger logistics space.Construction on the development wrapped up in 2017,and the buildings were roughly 95% occupied at the timeof the sale. HUB 25 is located just south of theintersection of I-25 and I-76, an area beginning to see
explosive growth. Nearby, ProLogis recently brokeground on a multi-building campus containing just over600,000 SF, all of which is speculative.
The most notable single-asset trade of the year waslikely the October 2018 sale of the largest industrialbuilding in the metro, a 1.3 million SF distribution centerin Brighton. Sears occupies about 150,000 SF at thebuilding, which was formerly entirely occupied by Searsand Kmart prior to significant downsizing. Sears stillretains its lease on the whole building, however, and asof yet hasn't worked to lease or sublease the more than1 million SF of currently unused space.
The building was acquired by Newport Beach, CA-basedStarboard Realty Partners for $41 million ($31/SF), whichcited the expectation of demand growth along the I-76corridor. Weeks after the deal closed, Sears would go onto file for Chapter 11 Bankruptcy protection. While Searsmay continue to operate in some capacity for a time, it'soutlook even one year out is highly uncertain. That andthe fact that over one million SF at the building iscurrently unused, along with a new owner expecting areturn on its investment, brings a high likelihood thatmost or all of this building will hit the market sometimeover the next year.
SALES VOLUME & MARKET SALE PRICE PER SF
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Sales Past 12 Months
517 6.9% $122 10.4%Sale Comparables Avg. Cap Rate Avg. Price/SF Avg. Vacancy At Sale
SALE COMPARABLE LOCATIONS
SALE COMPARABLES SUMMARY STATISTICS
Sales Attributes Low Average Median High
Sale Price $100,000 $4,037,399 $2,192,500 $38,553,500
Price Per SF $4.94 $122 $144 $673
Cap Rate 4.5% 6.9% 6.9% 12.0%
Time Since Sale in Months 0.0 6.5 6.8 11.9
Property Attributes Low Average Median High
Building SF 685 29,143 14,445 500,000
Ceiling Height 8' 16'9" 16' 36'
Docks 0 4 0 100
Vacancy Rate At Sale 0% 10.4% 0% 100%
Year Built 1878 1977 1976 2019
Star Rating 2.0
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Sales Past 12 Months
Property Name - Address Rating Yr Built Bldg SF Vacancy Price Price/SF
Property
Sale Date
Sale
Cap Rate
RECENT SIGNIFICANT SALES
-1 Building 222019 419,060 100% $38,553,500 $92
18100 E 40th Ave6/7/2019 -
-2 Bldg 12018 177,298 28.1% $32,508,186 $183
5775 Broadway9/16/2019 4.5%
-3 Smith Road Commerce…2016 290,147 67.2% $28,000,000 $97
12900 E Smith Rd12/20/2018 -
-4 PESCO Building2016 112,966 27.0% $22,000,000 $195
6144 N Panasonic Way7/11/2019 5.6%
-5 16200 Table Mountain Pky1998 227,500 0% $20,050,000 $8812/27/2018 6.2%
-6 Building 232019 184,040 100% $18,956,100 $103
18000 E 40th Ave6/7/2019 -
-7 2555 W Midway Blvd1981 363,582 0% $18,750,000 $526/20/2019 -
-8 Bldg 22007 161,524 0% $17,951,950 $111
2460 Airport Blvd5/20/2019 -
-9 7103 S Revere Pky1983 58,405 0% $16,890,000 $2891/14/2019 7.6%
-10 INOVA Dry Creek Flex2017 71,172 0% $16,100,000 $226
7304 S Joliet St10/12/2018 6.3%
-11 Bldg 12001 103,565 0% $15,700,000 $152
11575 Main St8/6/2019 6.4%
-12 5120 Race Ct1972 124,500 0% $14,137,212 $1144/1/2019 7.1%
-13 10949 E Peakview Ave1986 86,020 0% $14,027,499 $1631/28/2019 -
-14 Highfield Building 62018 92,000 0% $13,080,263 $142
8447 Highfield Pky8/29/2019 -
-15 50 S Kalamath St1960 214,991 98.6% $13,074,074 $616/25/2019 -
-16 W. 60th Place & Broadway1984 69,096 0% $13,000,000 $188
301 W 60th Pl3/14/2019 -
-17 5175 Joliet St1979 119,983 0% $12,847,040 $1071/28/2019 -
-18 13705 Compark Blvd2014 63,882 0% $12,800,000 $20010/17/2018 7.2%
-19 Bldg 22018 71,930 0% $12,741,814 $177
5725 Broadway9/16/2019 4.5%
-20 7909 Chambers Rd2018 52,000 0% $12,375,000 $2386/3/2019 6.7%
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Economy
Although Denver’s overall employment growth has shownsigns of a slight slowdown along with the national index,the greater Denver area is adding tech jobs at anaccelerating pace. Employment in Professional, Scientific& Technical Services grew by more than 8% year-over-year as of July, a new high watermark for the cycle.Corporate expansions and relocations by tech companiessuch as Amazon, Slack, and Conga are drivingemployment gains as the war for talent rages on in ahistorically tight U.S. job market.
Denver has been frequently lauded as a destination foryoung, educated job seekers throughout this cycle, andcurrent labor conditions reinforces this proposition today.Headwinds could come from housing costs, which aredramatically higher today for both renters andprospective owners. While home prices continue to climbinto the stratosphere (albeit at a slower rate than thepeak years of this cycle), apartment rent growth hasmoderated alongside elevated levels of construction,which may provide a relief valve for those consideringthe metro for its otherwise robust employment prospects.
Along with a young, highly educated, and growing laborforce, the FasTracks transit expansion is expected to paydividends as additional lines connect downtown to NorthDenver, Aurora and the Denver International Airport, allin addition to an expansion to the southeast rail line.Healthcare, a major growth sector for years to come, isseeing major investment in the $1.3 billion VA hospital inAurora, the Denver Health Administration’s newheadquarters in South Midtown, and Catalyst’s 300,000-SF digital health facility in RiNo (Platte River Submarket).
Geographic isolation remains an economic liability insome respects. The geographic separation from largebusiness and financial centers makes locating acorporate headquarters here difficult for companies thatbenefit from proximity to suppliers, competitors,financiers, and customers, although firms that draw onDenver’s natural resources and brainpower have thrived.As a result, the metro has had to rely on its own brand ofspecialization in high-value-add industries likeengineering, energy, communications, and high tech todrive growth.
DENVER EMPLOYMENT BY INDUSTRY IN THOUSANDS
NAICS Industry Jobs LQ MarketUS USMarketUSMarket
Current Jobs Current Growth 10 Yr Historical 5 Yr Forecast
-0.04%0.24%1.03%1.14%1.15%-0.18%0.570Manufacturing
0.43%0.96%1.25%1.97%0.96%1.68%1.0278Trade, Transportation and Utilities
0.35%0.76%0.91%1.68%0.08%0.76%0.9140 Retail Trade
0.33%0.40%1.07%1.71%0.88%-1.47%1.3111Financial Activities
0.75%1.03%0.04%1.36%0.49%-1.13%0.9199Government
0.16%1.01%2.45%4.07%2.74%2.11%1.3112Natural Resources, Mining and Construction
0.53%0.87%2.10%3.47%2.00%2.66%0.8194Education and Health Services
0.93%1.41%2.72%3.43%2.18%3.26%1.3284Professional and Business Services
0.56%0.21%0.13%1.14%-0.70%-0.71%1.850Information
0.57%0.75%2.55%3.09%2.44%0.40%1.0171Leisure and Hospitality
0.26%0.87%1.02%2.46%1.29%4.76%1.062Other Services
Total Employment 1,531 1.0 1.32% 1.48% 2.52% 1.52% 0.92% 0.52%
Source: Oxford Economics
LQ = Location Quotient
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Economy
Source: Oxford Economics
YEAR OVER YEAR JOB GROWTH
DEMOGRAPHIC TRENDS
Current ChangeCurrent Level
Metro U.S.Metro U.S.Demographic Category
10-Year Change
Metro U.S. Metro U.S.
Forecast Change (5 Yrs)
Population 329,563,4062,971,468 1.2% 0.7% 1.7% 0.7% 1.3% 0.7%
Households 121,338,0001,132,683 1.1% 0.5% 1.6% 0.6% 1.2% 0.6%
Median Household Income $64,064$81,630 3.0% 3.3% 3.2% 2.4% 4.2% 4.3%
Labor Force 163,664,0471,677,701 1.2% 1.0% 1.9% 0.6% 0.9% 0.5%
Unemployment 3.6%3.2% -0.1% -0.2% -0.5% -0.6% - -
Source: Oxford Economics
POPULATION GROWTH
Source: Oxford Economics
LABOR FORCE GROWTH INCOME GROWTH
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Submarkets
DENVER SUBMARKETS
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Submarkets
SUBMARKET INVENTORY
12 Month Deliveries Under Construction
Bldgs SF (000) Percent Rank
Inventory
Bldgs SF (000) Percent RankBldgs SF (000) % Market RankSubmarketNo.
1 Arapahoe Rd 45 0% 35 0 - - -4 0 0 0% -
2 Aurora 2,714 1.1% 19 1 25 0.9% 13105 1 25 0.9% 14
3 Broomfield County 4,988 2.0% 16 2 188 3.8% 8157 2 247 5.0% 7
4 Cent E I-70/Montbello 18,130 7.4% 4 1 30 0.2% 11331 0 0 0% -
5 Centennial 10,969 4.5% 9 2 265 2.4% 5284 7 375 3.4% 5
6 Clear Creek County 125 0.1% 32 0 - - -9 0 0 0% -
7 Commerce City 13,032 5.3% 6 1 12 0.1% 15519 4 683 5.2% 4
8 Denver Tech Center 26 0% 37 0 - - -1 0 0 0% -
9 DIA 9,418 3.8% 13 4 910 9.7% 2232 3 827 8.8% 3
10 East Hampden 146 0.1% 30 0 - - -8 0 0 0% -
11 East I-70/270 19,020 7.8% 3 1 209 1.1% 7440 2 45 0.2% 11
12 Elbert County 158 0.1% 29 0 - - -18 0 0 0% -
13 Gilpin County 22 0% 38 0 - - -4 0 0 0% -
14 Glendale 2,646 1.1% 20 0 - - -150 0 0 0% -
15 Greenwood Village 7 0% 39 0 - - -1 0 0 0% -
16 Highlands Ranch 1,776 0.7% 23 0 - - -50 3 345 19.4% 6
17 Inverness 2,410 1.0% 21 0 - - -54 0 0 0% -
18 Lakewood 126 0.1% 31 0 - - -13 0 0 0% -
19 Lower Central 8,311 3.4% 15 0 - - -353 0 0 0% -
20 Lower North Central 9,693 4.0% 12 0 - - -438 0 0 0% -
21 Lower South Central 8,520 3.5% 14 0 - - -547 0 0 0% -
22 Meridian 700 0.3% 27 1 28 4.0% 1240 0 0 0% -
23 Mid Central 4,282 1.7% 18 0 - - -271 1 30 0.7% 13
24 Mid South Central 1,311 0.5% 25 0 - - -120 0 0 0% -
25 North Denver 10,062 4.1% 10 3 371 3.7% 3286 4 854 8.5% 2
26 Northwest Denver 14,564 5.9% 5 2 142 1.0% 9540 2 160 1.1% 9
27 Outlying Adams Cnty 65 0% 34 0 - - -8 0 0 0% -
28 Outlying Arapahoe Cty 753 0.3% 26 1 250 33.2% 611 0 0 0% -
29 Outlying Douglas Cnty 37 0% 36 0 - - -4 0 0 0% -
30 Park County 92 0% 33 0 - - -14 0 0 0% -
31 Parker/Castle Rock 1,408 0.6% 24 1 12 0.9% 14119 2 31 2.2% 12
32 Quebec St 11,288 4.6% 7 0 - - -278 0 0 0% -
33 Southeast C-470 1,789 0.7% 22 0 - - -84 0 0 0% -
34 Southwest C-470 11,062 4.5% 8 1 50 0.5% 10528 0 0 0% -
35 SW DIA/Pena Blvd 37,571 15.3% 1 5 1,008 2.7% 1402 12 2,889 7.7% 1
36 Upper Central 441 0.2% 28 0 - - -39 0 0 0% -
37 Upper North Central 9,925 4.0% 11 0 - - -432 2 48 0.5% 10
38 Upper South Central 4,479 1.8% 17 0 - - -340 0 0 0% -
39 West Denver 23,198 9.5% 2 2 301 1.3% 4557 4 220 1.0% 8
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Submarkets
SUBMARKET RENT
Growth
Market Rent
Per SFSubmarketNo.
12 Month Market Rent QTD Annualized Market Rent
RankRank GrowthRank
1 Arapahoe Rd -7.0%9 3.5% 18$14.15 5
2 Aurora -11.5%14 3.2% 31$12.75 36
3 Broomfield County -8.0%28 3.3% 29$10.43 7
4 Cent E I-70/Montbello -10.8%39 4.5% 4$7.04 34
5 Centennial -9.7%16 3.9% 10$12.36 26
6 Clear Creek County -10.8%4 4.2% 6$15.04 35
7 Commerce City -9.3%32 4.0% 8$9.92 20
8 Denver Tech Center -9.9%1 3.4% 24$17.00 29
9 DIA -7.9%33 4.0% 7$9.88 6
10 East Hampden -4.0%7 -2.2% 39$14.21 1
11 East I-70/270 -4.2%36 4.3% 5$8.39 2
12 Elbert County -8.9%24 3.2% 35$11.02 15
13 Gilpin County -9.3%17 3.3% 28$12.17 21
14 Glendale -9.1%21 3.6% 16$11.80 18
15 Greenwood Village -9.9%8 3.5% 19$14.18 28
16 Highlands Ranch -5.6%10 3.5% 23$14.00 3
17 Inverness -9.1%11 3.7% 14$13.44 17
18 Lakewood -9.6%19 3.5% 20$11.89 25
19 Lower Central -9.5%34 3.7% 15$9.60 23
20 Lower North Central -8.8%27 3.5% 17$10.52 11
21 Lower South Central -8.6%29 3.3% 27$10.24 10
22 Meridian -8.3%3 3.0% 38$15.17 8
23 Mid Central -8.8%22 3.1% 36$11.12 12
24 Mid South Central -8.9%20 3.1% 37$11.84 14
25 North Denver -6.2%23 4.7% 2$11.07 4
26 Northwest Denver -9.8%30 3.8% 11$10.11 27
27 Outlying Adams Cnty -8.4%31 3.3% 26$9.93 9
28 Outlying Arapahoe Cty -16.5%26 3.7% 13$10.60 39
29 Outlying Douglas Cnty -9.6%5 3.5% 22$14.60 24
30 Park County -9.4%12 3.4% 25$13.15 22
31 Parker/Castle Rock -14.4%2 3.2% 32$15.62 38
32 Quebec St -10.3%37 4.6% 3$7.90 32
33 Southeast C-470 -10.0%13 3.9% 9$12.76 31
34 Southwest C-470 -11.7%15 3.2% 33$12.61 37
35 SW DIA/Pena Blvd -10.6%38 4.9% 1$7.32 33
36 Upper Central -9.9%6 3.2% 30$14.56 30
37 Upper North Central -9.0%35 3.8% 12$9.54 16
38 Upper South Central -8.8%25 3.5% 21$10.74 13
39 West Denver -9.3%18 3.2% 34$12.16 19
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Submarkets
SUBMARKET VACANCY & NET ABSORPTION
12 Month Net Absorption
Rank Construct. Ratio
Vacancy
SF % of InvSF PercentSubmarketNo. Rank
1 Arapahoe Rd - - -0 0% --
2 Aurora 152,636 5.6% 0.547,993 1.8% 925
3 Broomfield County 517,045 10.4% -(22,305) -0.4% 3527
4 Cent E I-70/Montbello 792,315 4.4% -(374,048) -2.1% 3916
5 Centennial 613,880 5.6% 0.7340,418 3.1% 424
6 Clear Creek County - - -255 0.2% 20-
7 Commerce City 679,603 5.2% 4.2148,593 1.1% 622
8 Denver Tech Center - - -0 0% --
9 DIA 460,958 4.9% 1.5537,933 5.7% 319
10 East Hampden - - -1,199 0.8% 19-
11 East I-70/270 549,147 2.9% -(311,330) -1.6% 3810
12 Elbert County 7,725 4.9% -4,568 2.9% 1818
13 Gilpin County - - -0 0% --
14 Glendale 32,402 1.2% -24,688 0.9% 142
15 Greenwood Village - - -0 0% --
16 Highlands Ranch 362,627 20.4% 8.440,956 2.3% 1130
17 Inverness 85,323 3.5% -(3,247) -0.1% 2912
18 Lakewood - - -0 0% --
19 Lower Central 402,145 4.8% -(20,448) -0.2% 3417
20 Lower North Central 256,761 2.6% -62,312 0.6% 89
21 Lower South Central 173,757 2.0% -(57,033) -0.7% 374
22 Meridian 2,585 0.4% -12,707 1.8% 161
23 Mid Central 154,972 3.6% 1.030,452 0.7% 1313
24 Mid South Central 31,441 2.4% -(14,628) -1.1% 325
25 North Denver 685,007 6.8% 0.1962,681 9.6% 226
26 Northwest Denver 594,912 4.1% 4.138,949 0.3% 1215
27 Outlying Adams Cnty - - -0 0% --
28 Outlying Arapahoe Cty 37,333 5.0% -10,180 1.4% 1720
29 Outlying Douglas Cnty - - -0 0% --
30 Park County 2,387 2.6% -(115) -0.1% 287
31 Parker/Castle Rock 150,628 10.7% -(48,824) -3.5% 3628
32 Quebec St 603,957 5.4% -92,554 0.8% 723
33 Southeast C-470 73,040 4.1% -24,436 1.4% 1514
34 Southwest C-470 281,157 2.5% -(17,744) -0.2% 336
35 SW DIA/Pena Blvd 4,092,851 10.9% 1.32,046,027 5.4% 129
36 Upper Central 11,455 2.6% -(11,455) -2.6% 318
37 Upper North Central 496,195 5.0% 1.142,042 0.4% 1021
38 Upper South Central 156,740 3.5% -(4,518) -0.1% 3011
39 West Denver 371,302 1.6% 1.1165,033 0.7% 53
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Supply & Demand Trends
OVERALL SUPPLY & DEMAND
Net AbsorptionInventory
% of Inv Construction RatioSF SF Growth % Growth SFYear
2023 2,568,370 1.0% 0.8%2,063,654 1.2258,610,781
2022 2,890,300 1.1% 0.9%2,234,959 1.3256,042,411
2021 3,167,472 1.3% 0.9%2,313,255 1.4253,152,111
2020 3,983,180 1.6% 0.8%1,987,601 2.0249,984,639
2019 6,045,329 2.5% 1.3%3,111,767 1.9246,001,459
YTD 5,433,315 2.3% 1.0%2,419,138 2.2245,389,445
2018 3,410,459 1.4% 1.3%3,080,984 1.1239,956,130
2017 4,731,370 2.0% 2.1%4,969,200 1.0236,545,671
2016 3,667,864 1.6% 0.9%2,091,687 1.8231,814,301
2015 1,471,226 0.6% 0.7%1,562,339 0.9228,146,437
2014 2,603,152 1.2% 2.4%5,489,406 0.5226,675,211
2013 (2,588,804) -1.1% 1.0%2,314,212 -224,072,059
2012 372,418 0.2% 1.1%2,530,207 0.1226,660,863
2011 (332,711) -0.1% -0.4%(795,578) -226,288,445
2010 (1,169,369) -0.5% 0.2%388,839 -226,621,156
2009 279,477 0.1% -0.4%(826,108) -227,790,525
2008 2,483,386 1.1% 0%67,879 36.6227,511,048
2007 2,943,527 1.3% 2.3%5,069,736 0.6225,027,662
SPECIALIZED INDUSTRIAL SUPPLY & DEMAND
Net AbsorptionInventory
% of Inv Construction RatioSF SF Growth % Growth SFYear
2023 233,939 0.5% 0.1%31,168 7.550,885,719
2022 261,084 0.5% 0.3%153,140 1.750,651,780
2021 284,310 0.6% 0.5%234,488 1.250,390,696
2020 734,963 1.5% 1.0%514,090 1.450,106,386
2019 855,438 1.8% 0%(5,986) -49,371,423
YTD 727,164 1.5% -0.1%(28,451) -49,243,149
2018 29,539 0.1% 0%(16,789) -48,515,985
2017 (199,629) -0.4% -1.1%(544,988) -48,486,446
2016 (77,620) -0.2% 0%19,303 -48,686,075
2015 (90,919) -0.2% 0.3%166,625 -48,763,695
2014 (146,589) -0.3% 0.3%156,565 -48,854,614
2013 (2,618,010) -5.1% -1.7%(855,653) -49,001,203
2012 58,175 0.1% 0.4%199,640 0.351,619,213
2011 30,789 0.1% -1.0%(500,370) -51,561,038
2010 (212,704) -0.4% 0%863 -51,530,249
2009 (72,238) -0.1% 0.6%293,599 -51,742,953
2008 (24,959) 0% -1.0%(521,394) -51,815,191
2007 (7,244) 0% 1.6%809,665 -51,840,150
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Supply & Demand Trends
LOGISTICS SUPPLY & DEMAND
Net AbsorptionInventory
% of Inv Construction RatioSF SF Growth % Growth SFYear
2023 2,204,726 1.3% 1.2%2,084,608 1.1172,598,422
2022 2,483,030 1.5% 1.2%2,127,948 1.2170,393,696
2021 2,722,935 1.6% 1.3%2,129,316 1.3167,910,666
2020 2,905,848 1.8% 0.8%1,342,903 2.2165,187,731
2019 4,793,070 3.0% 1.8%2,852,822 1.7162,281,883
YTD 4,493,567 2.9% 1.3%2,186,025 2.1161,982,380
2018 3,134,828 2.0% 1.7%2,699,628 1.2157,488,813
2017 4,617,957 3.1% 3.4%5,213,110 0.9154,353,985
2016 3,670,586 2.5% 1.4%2,063,688 1.8149,736,028
2015 1,176,011 0.8% 0.4%516,930 2.3146,065,442
2014 2,161,190 1.5% 2.8%4,041,441 0.5144,889,431
2013 (153,485) -0.1% 1.7%2,411,317 -142,728,241
2012 164,309 0.1% 1.2%1,740,832 0.1142,881,726
2011 (326,424) -0.2% -0.6%(816,388) -142,717,417
2010 (981,181) -0.7% 0.2%316,564 -143,043,841
2009 57,934 0% -0.7%(1,068,408) -144,025,022
2008 1,821,981 1.3% 0.2%255,815 7.1143,967,088
2007 2,545,471 1.8% 2.5%3,553,616 0.7142,145,107
FLEX SUPPLY & DEMAND
Net AbsorptionInventory
% of Inv Construction RatioSF SF Growth % Growth SFYear
2023 129,705 0.4% -0.1%(52,122) -35,126,640
2022 146,186 0.4% -0.1%(46,129) -34,996,935
2021 160,227 0.5% -0.1%(50,549) -34,850,749
2020 342,369 1.0% 0.4%130,608 2.634,690,522
2019 396,821 1.2% 0.8%264,931 1.534,348,153
YTD 212,584 0.6% 0.8%261,564 0.834,163,916
2018 246,092 0.7% 1.2%398,145 0.633,951,332
2017 313,042 0.9% 0.9%301,078 1.033,705,240
2016 74,898 0.2% 0%8,696 8.633,392,198
2015 386,134 1.2% 2.6%878,784 0.433,317,300
2014 588,551 1.8% 3.9%1,291,400 0.532,931,166
2013 182,691 0.6% 2.3%758,548 0.232,342,615
2012 149,934 0.5% 1.8%589,735 0.332,159,924
2011 (37,076) -0.1% 1.6%521,180 -32,009,990
2010 24,516 0.1% 0.2%71,412 0.332,047,066
2009 293,781 0.9% -0.2%(51,299) -32,022,550
2008 686,364 2.2% 1.1%333,458 2.131,728,769
2007 405,300 1.3% 2.3%706,455 0.631,042,405
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Rent & Vacancy
OVERALL RENT & VACANCY
Market Rent
Per SF Index % Growth Vs Hist PeakYear
Vacancy
SF Percent Ppts Chg
2023 175 0.5% 10.6%$10.62 16,778,418 6.5% 0.1%
2022 174 0.9% 10.1%$10.57 16,277,666 6.4% 0.2%
2021 172 1.8% 9.1%$10.48 15,618,471 6.2% 0.3%
2020 169 3.1% 7.2%$10.29 14,756,398 5.9% 0.7%
2019 164 4.0% 4.0%$9.99 12,755,488 5.2% 1.1%
YTD 162 2.8% 2.8%$9.87 12,832,286 5.2% 1.1%
2018 158 7.1% 0%$9.60 9,818,109 4.1% 0.1%
2017 147 7.5% -6.6%$8.97 9,488,634 4.0% -0.2%
2016 137 7.6% -13.1%$8.34 9,726,464 4.2% 0.6%
2015 127 9.0% -19.3%$7.75 8,149,959 3.6% -0.1%
2014 117 9.1% -25.9%$7.11 8,241,072 3.6% -1.3%
2013 107 6.1% -32.1%$6.52 11,126,977 5.0% -2.1%
2012 101 3.4% -36.0%$6.14 15,966,818 7.0% -1.0%
2011 98 1.5% -38.1%$5.94 18,191,107 8.0% 0.2%
2010 96 -0.9% -39.0%$5.86 17,728,240 7.8% -0.6%
2009 97 -2.8% -38.5%$5.91 19,286,448 8.5% 0.5%
2008 100 0.6% -36.7%$6.08 18,180,863 8.0% 1.0%
2007 99 3.0% -37.0%$6.05 15,765,356 7.0% -1.1%
SPECIALIZED INDUSTRIAL RENT & VACANCY
Market Rent
Per SF Index % Growth Vs Hist PeakYear
Vacancy
SF Percent Ppts Chg
2023 184 0.5% 7.3%$11.03 2,839,533 5.6% 0.4%
2022 183 0.9% 6.7%$10.97 2,637,197 5.2% 0.2%
2021 181 1.6% 5.7%$10.87 2,529,224 5.0% 0.1%
2020 178 2.5% 4.0%$10.70 2,478,963 4.9% 0.4%
2019 174 1.5% 1.5%$10.44 2,257,722 4.6% 1.7%
YTD 172 0.6% 0.6%$10.35 2,151,636 4.4% 1.5%
2018 171 8.1% 0%$10.29 1,396,021 2.9% 0.1%
2017 158 8.6% -7.5%$9.51 1,349,693 2.8% 0.7%
2016 146 7.7% -14.9%$8.76 1,004,334 2.1% -0.2%
2015 135 10.0% -21.0%$8.13 1,101,257 2.3% -0.5%
2014 123 8.9% -28.1%$7.39 1,358,801 2.8% -0.6%
2013 113 6.0% -34.0%$6.79 1,661,955 3.4% -3.2%
2012 107 4.3% -37.7%$6.41 3,424,312 6.6% -0.3%
2011 102 2.5% -40.3%$6.14 3,565,777 6.9% 1.0%
2010 100 0.5% -41.8%$5.99 3,034,618 5.9% -0.4%
2009 99 -0.9% -42.1%$5.96 3,248,185 6.3% -0.7%
2008 100 -0.1% -41.6%$6.01 3,614,022 7.0% 1.0%
2007 100 1.4% -41.6%$6.01 3,117,587 6.0% -1.6%
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Rent & Vacancy
LOGISTICS RENT & VACANCY
Market Rent
Per SF Index % Growth Vs Hist PeakYear
Vacancy
SF Percent Ppts Chg
2023 179 0.4% 11.7%$9.69 11,374,152 6.6% 0%
2022 178 0.9% 11.2%$9.65 11,256,548 6.6% 0.1%
2021 177 1.8% 10.3%$9.56 10,898,368 6.5% 0.3%
2020 173 3.3% 8.3%$9.39 10,298,974 6.2% 0.9%
2019 168 4.8% 4.8%$9.09 8,732,049 5.4% 1.1%
YTD 166 3.5% 3.5%$8.97 9,096,149 5.6% 1.3%
2018 160 7.1% 0%$8.67 6,788,607 4.3% 0.2%
2017 150 7.5% -6.6%$8.09 6,353,407 4.1% -0.5%
2016 139 7.8% -13.2%$7.53 6,948,560 4.6% 1.0%
2015 129 9.6% -19.4%$6.99 5,341,334 3.7% 0.4%
2014 118 10.1% -26.5%$6.38 4,682,253 3.2% -1.4%
2013 107 6.7% -33.2%$5.79 6,562,155 4.6% -1.7%
2012 100 3.4% -37.4%$5.42 9,063,782 6.3% -1.2%
2011 97 1.8% -39.5%$5.25 10,706,805 7.5% 0.4%
2010 95 -0.7% -40.6%$5.15 10,216,841 7.1% -0.9%
2009 96 -4.1% -40.1%$5.19 11,514,586 8.0% 0.8%
2008 100 0.5% -37.6%$5.41 10,388,244 7.2% 1.0%
2007 100 3.2% -37.9%$5.39 8,822,078 6.2% -0.8%
FLEX RENT & VACANCY
Market Rent
Per SF Index % Growth Vs Hist PeakYear
Vacancy
SF Percent Ppts Chg
2023 155 0.5% 10.9%$14.45 2,564,733 7.3% 0.5%
2022 154 0.9% 10.4%$14.38 2,383,921 6.8% 0.5%
2021 152 1.8% 9.3%$14.25 2,190,879 6.3% 0.6%
2020 150 3.1% 7.4%$13.99 1,978,461 5.7% 0.6%
2019 145 4.2% 4.2%$13.58 1,765,717 5.1% 0.3%
YTD 144 3.0% 3.0%$13.42 1,584,501 4.6% -0.2%
2018 139 5.8% 0%$13.03 1,633,481 4.8% -0.5%
2017 132 6.2% -5.5%$12.31 1,785,534 5.3% 0%
2016 124 7.1% -11.0%$11.59 1,773,570 5.3% 0.2%
2015 116 6.3% -16.9%$10.83 1,707,368 5.1% -1.6%
2014 109 6.3% -21.8%$10.19 2,200,018 6.7% -2.3%
2013 103 4.4% -26.5%$9.58 2,902,867 9.0% -1.8%
2012 98 2.3% -29.6%$9.17 3,478,724 10.8% -1.4%
2011 96 -0.4% -31.2%$8.97 3,918,525 12.2% -1.7%
2010 96 -2.6% -30.9%$9.00 4,476,781 14.0% -0.2%
2009 99 -1.0% -29.0%$9.25 4,523,677 14.1% 1.0%
2008 100 1.3% -28.3%$9.34 4,178,597 13.2% 0.8%
2007 99 4.0% -29.2%$9.22 3,825,691 12.3% -1.1%
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Sale Trends
OVERALL SALES
Completed Transactions (1)
Turnover Avg Price/SFDeals VolumeYear
Market Pricing Trends (2)
Avg Price Price IndexAvg Cap Rate Price/SF Cap Rate
2023 -- - -- 263- $155.89 6.5%
2022 -- - -- 257- $152.61 6.5%
2021 -- - -- 251- $148.99 6.4%
2020 -- - -- 242- $143.15 6.3%
2019 -- - -- 226- $133.96 6.3%
YTD $1,029 M355 3.8% $121.85$4,155,031 2227.0% $131.58 6.3%
2018 $1,546 M581 8.2% $102.77$4,436,314 2156.8% $127.25 6.3%
2017 $1,176 M598 5.7% $109.62$3,110,277 1947.0% $114.82 6.4%
2016 $1,225 M512 5.8% $101.20$3,355,311 1747.5% $102.98 6.7%
2015 $914.0 M514 6.1% $78.24$2,338,495 1567.3% $92.45 6.9%
2014 $1,043 M677 7.9% $67.22$2,216,677 1377.5% $81.12 7.4%
2013 $622.1 M472 5.5% $57.92$1,819,061 1198.9% $70.62 7.8%
2012 $529.1 M410 4.4% $59.59$1,957,400 1098.3% $64.80 8.2%
2011 $287.5 M291 2.6% $55.13$1,486,254 1028.0% $60.42 8.5%
2010 $345.7 M331 3.1% $55.70$1,382,310 968.9% $56.89 8.9%
2009 $228.5 M241 2.1% $53.23$1,513,238 919.8% $53.86 9.3%
2008 $604.5 M436 3.9% $69.04$2,203,538 1007.7% $59.27 8.8%
(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.
(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.
SPECIALIZED INDUSTRIAL SALES
Completed Transactions (1)
Turnover Avg Price/SFDeals VolumeYear
Market Pricing Trends (2)
Avg Price Price IndexAvg Cap Rate Price/SF Cap Rate
2023 -- - -- 268- $140.49 6.4%
2022 -- - -- 262- $137.44 6.4%
2021 -- - -- 256- $134.18 6.3%
2020 -- - -- 246- $129.14 6.2%
2019 -- - -- 232- $121.61 6.3%
YTD $198.3 M53 3.9% $116.03$4,603,553 2296.7% $119.97 6.3%
2018 $179.8 M83 5.1% $104.20$3,268,827 2208.0% $115.30 6.3%
2017 $137.3 M75 3.4% $109.87$2,474,113 1967.3% $102.61 6.4%
2016 $162.4 M73 4.4% $81.78$2,794,447 1739.3% $90.79 6.7%
2015 $149.6 M79 4.8% $73.30$2,228,606 1567.5% $81.69 7.0%
2014 $234.4 M108 7.3% $69.03$2,625,217 1388.0% $72.20 7.4%
2013 $96.9 M84 6.1% $39.17$1,374,521 1198.7% $62.20 7.9%
2012 $87.2 M50 5.2% $35.28$2,484,386 1097.4% $57.15 8.2%
2011 $43.6 M35 1.8% $46.82$1,282,181 1028.7% $53.19 8.6%
2010 $44.1 M58 2.5% $43.73$979,233 9610.4% $50.36 8.9%
2009 $50.3 M41 2.4% $42.96$1,397,108 9111.7% $47.64 9.4%
2008 $98.2 M54 3.4% $55.10$2,121,972 1008.5% $52.40 8.9%
(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.
(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.
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Sale Trends
LOGISTICS SALES
Completed Transactions (1)
Turnover Avg Price/SFDeals VolumeYear
Market Pricing Trends (2)
Avg Price Price IndexAvg Cap Rate Price/SF Cap Rate
2023 -- - -- 267- $150.71 6.5%
2022 -- - -- 261- $147.57 6.5%
2021 -- - -- 255- $144.09 6.4%
2020 -- - -- 245- $138.39 6.3%
2019 -- - -- 229- $129.26 6.4%
YTD $676.1 M234 4.0% $117.52$3,993,280 2257.0% $126.79 6.4%
2018 $1,134 M377 9.6% $97.13$4,993,413 2186.3% $123.07 6.3%
2017 $785.3 M355 5.4% $108.42$3,266,848 1966.8% $110.89 6.5%
2016 $784.3 M323 6.1% $92.97$3,350,216 1766.7% $99.52 6.7%
2015 $567.5 M321 6.6% $72.60$2,405,071 1587.2% $89.24 6.9%
2014 $652.3 M415 8.2% $65.61$2,219,558 1387.3% $77.87 7.4%
2013 $393.2 M278 5.1% $60.62$1,949,811 1208.9% $67.63 7.9%
2012 $270.2 M276 3.8% $55.25$1,476,924 1097.9% $61.82 8.2%
2011 $202.8 M177 2.9% $56.51$1,680,290 1028.0% $57.58 8.6%
2010 $198.7 M195 2.8% $54.52$1,341,934 968.5% $54.16 8.9%
2009 $145.8 M160 2.2% $52.06$1,596,074 918.4% $51.20 9.4%
2008 $370.1 M248 4.0% $65.60$2,031,491 1007.5% $56.47 8.9%
(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.
(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.
FLEX SALES
Completed Transactions (1)
Turnover Avg Price/SFDeals VolumeYear
Market Pricing Trends (2)
Avg Price Price IndexAvg Cap Rate Price/SF Cap Rate
2023 -- - -- 246- $203.03 6.5%
2022 -- - -- 241- $198.74 6.4%
2021 -- - -- 235- $193.94 6.4%
2020 -- - -- 225- $186.28 6.3%
2019 -- - -- 211- $174.34 6.3%
YTD $154.7 M68 3.1% $157.36$4,401,525 2077.1% $171.16 6.3%
2018 $232.4 M121 6.1% $141.37$3,483,595 1997.2% $164.62 6.3%
2017 $253.7 M168 10.3% $113.34$3,074,961 1837.2% $151.34 6.4%
2016 $278.3 M116 6.5% $165.35$3,836,621 1668.0% $137.26 6.6%
2015 $196.9 M114 5.7% $107.98$2,241,473 1497.6% $123.38 6.9%
2014 $156.7 M154 7.5% $71.69$1,768,572 1337.4% $109.59 7.3%
2013 $131.9 M110 6.0% $74.11$1,889,578 1189.1% $97.19 7.7%
2012 $171.8 M84 5.7% $113.11$3,327,832 1099.5% $90.16 7.9%
2011 $41.1 M79 2.7% $59.11$1,002,688 1028.0% $84.49 8.3%
2010 $102.9 M78 5.0% $66.23$1,831,198 969.1% $79.42 8.6%
2009 $32.4 M40 1.1% $100.78$1,349,610 929.5% $75.59 9.0%
2008 $136.2 M134 4.5% $102.25$3,060,907 1007.6% $82.61 8.6%
(1) Completed transaction data is based on actual arms-length sales transactions and levels are dependent on the mix of what happened to sell in the period.
(2) Market price trends data is based on the estimated price movement of all properties in the market, informed by actual transactions that have occurred.
10/7/2019Copyrighted report licensed to Hoff & Leigh, Inc. - 408800.
Page 28
Q3, 2019
PREPARED BYBrandon Langiewicz,Partner
DENVER AGENTS
RECENT INDUSTRIAL TRANSACTIONS
SIZE
5454 N WASHINGTON ST
5454 North Washington Street.Denver, CO 80216
TERMS
$594,900
3,158 SQFT FOR SALE SIZE
6915 BROADWAY
6915 Broadway,Denver, CO 80221
TERMS
$399,700
2,300 SQFT FOR SALE SIZE
18606 LONGS WAY
18606 LONGS WAY #A8,Parker, CO 80134
TERMS
$191,900
1,196 SQFT FOR SALE
SOLD SOLD SOLD
Arianna GuzmanO: 720.572.5187C: 720.399.1132
Brandon LangiewiczO: 720.572.5187C: 715.512.0265
Chris IsbellO: 720.572.5187C: [email protected]
Beau HershbergerO: 720.572.5187C: 303.667.2530
Shane RobsonO: 720.572.5187C: 512.450.8203
OUR NETWORK IS YOUR EDGE.
All information is from sources deemed reliable and is subject to errors,omissions, change of price, rental, prior sale, and withdrawal without notice. Prospect should carefully verify each item of information contained herein.
Hoff & Leigh | 2700 S Broadway #307 | Denver, CO 80113 | 720.572.5187 office www.hoffleigh.com/denver
INDUSTRIAL MARKET REPORT
Denver, CO