DENVER-The metro-area industrial market absorbed about 1.37 million sf in the first half of the year, almost as much as it did in all of 2004, shows a recent report by the Frederick Ross Co., the largest locally owned, full-service commercial real estate firm based in Denver. The vacancy rate dropped from 8.84% to 8.31%, with much of the activity involving existing tenants expanding into additional space, according to Ross.
Warehouses propelled the overall market. The Ross report notes that is to be expected, as that part of the market is almost seven times as large as the R&D/flex part of the market. Warehouse vacancies dropped a half a point to 6.57% and R&D flex buildings also dropped by a half of a percent, although vacancies remained high in that product at 19.8%.
Ross calls the moderate amount of new supply of 460,000 sf as "deliberate," as it is targeted to meet demand. However, it cautions that there's another 1.8 million sf in the pipeline. Despite the improving fundamentals, rental rates are virtually unchanged, according to Ross. And sales activity is relatively light, with only 10 properties trading for $3 million or more in the first half of the year.
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