The Denver industrial real estate market is sending mixed signals this year. On one hand, Denver industrial leasing has slowed considerably, with net absorption barely reaching 80,000 square feet in Q2—far below the typical five-year quarterly average of 1.3 million square feet. On the other hand, Denver industrial property sales are surging, hitting $717 million last quarter, the strongest level since 2022. Investors are clearly still betting on the long-term strength of the market, even as tenants are taking a step back.
Much of that momentum came from large portfolio deals. Clarion Partners’ $119 million sale of five airport-area properties to Principal Asset Management was one of the quarter’s biggest drivers. Still, the leasing side told a different story. Sublease space dragged absorption into low territory, with Amprius Technologies pulling back on plans for an 800,000-square-foot Denver warehouse and distribution space near Denver International Airport, a move that had ripple effects across the sector.
Not every submarket faced the same challenges. The I-76 corridor industrial absorption stood out with 353,000 square feet of positive activity, boosted by reoccupancies and fresh deals from tenants like Lineage and RMS Cranes. Developers, meanwhile, are adjusting their strategies. The Denver industrial construction pipeline is now at 4.8 million square feet, with nearly half already preleased or secured as build-to-suit projects for major names like PepsiCo and Philip Morris.
Rents tell their own story. Asking rates climbed to $9.72 per square foot, yet achieved rents fell more than 13% compared to last year. For tenants, this creates more room to negotiate favorable deals. For investors, the Denver commercial real estate trends in 2025 highlight a contrast: slowing leasing activity but robust Denver investment property sales.
Ultimately, the divergence signals that Denver commercial real estate investors remain confident in the long-term fundamentals of the market—even if Denver industrial rents and asking rates continue to fluctuate in the near term.
