Denver’s industrial market rebounds with completed projects

Evolving Trends in Denver’s Industrial Real Estate Market

In the Denver area, there are constant changes in shopping centers, new construction projects, and rising costs for restaurant owners. However, amidst this dynamic commercial real estate landscape, Denver’s industrial market is gaining momentum.

Recent reports from national real estate companies CBRE and JLL reveal that over 2 million square feet of warehouse and industrial space was leased in the third quarter, driven by major tenant deals and a growing demand for custom-built industrial facilities. Despite this positive trend, the amount of industrial space under construction is at its lowest point in a decade.

One notable factor contributing to this growth is the emergence of innovative opportunities for single-tenant warehouse spaces, catering to the needs of smaller businesses entering the market.

Brandon Rosely, senior research analyst at JLL, noted that the leasing activity picked up in quarter three after a slowdown in quarter two due to external factors like tariffs. He expressed optimism about the positive momentum behind leasing and anticipated a tightening of market metrics in the upcoming quarters.

The rebound in the industrial market was largely attributed to PepsiCo, which occupied 1.2 million square feet at its new bottling facility near Denver International Airport. Additionally, Trader Joe’s acquired two sizable vacant buildings, signaling further growth in the sector.

Despite the completion of major projects, the industrial development pipeline has reached a five-year low, creating opportunities for landlords to fill newly finished spaces. Meanwhile, tenants are gaining leverage and looking for upgrades as their lease renewals approach.

CBRE highlighted a decrease in year-over-year construction activity, with a significant portion of projects being build-to-suit or preleased. Notable projects under construction include the Aero 70 industrial complex in Aurora and Food Bank of the Rockies’ new distribution center in Aurora.

WareSpace, a national real estate firm, has identified a gap in the industrial real estate market for smaller businesses. By converting large, single-tenant warehouses into multiple smaller units, WareSpace aims to provide flexible industrial facilities tailored to the needs of growing companies.

Leasing volume in the third quarter of 2025 totaled 2.2 million square feet, with the average lease size being 41,200 square feet across 48 deals. Notable move-outs and renewals indicate a shifting landscape in Denver’s industrial market.

As the industrial real estate market in Denver continues to evolve, developers and tenants are adapting to new trends and demands. With a diverse tenant base and emerging industries, the city is poised for growth and innovation in the industrial sector.

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