The Denver Industrial Market ended the year with a total positive absorption of 3,412,339 SF and a total vacancy rate of 7.7%. This consistent positive absorption over the past 6 quarters, resulting in a 1% decrease in the vacancy rate since 2Q2009, is a strong indicator that the Denver market remains healthy and should continue its slow and steady recovery in 2011.
The majority of tenants and users continue to stay put in their existing facilities as a result of the lingering uncertainties surrounding the national economy and landlords aggressively working to retain tenants. However, we are seeing fewer downsizing companies and sublease spaces coming to market signaling improved local fundamentals.
Despite the slight uptick in commercial mortgage rates and SBA fee waivers expiring, we anticipate increased user-building sales in 2011 as property owners remain motivated to dispose of listed properties and the available for lease space continues to dwindle. In addition, the lack of new construction for the foreseeable future, condemnation of properties along rail lines for RTD projects, and pent-up demand from the past 24 months should continue to put downward pressure on the vacancy rate and in turn push lease rates and sale prices higher.
We also anticipate additional investment sales in 2011 as the capital markets continue to improve for well located and stable investment grade opportunities. Many would-be sellers and buyers of investment properties have remained on the sidelines since 2009 waiting for signs of life in the investment market and favorable access to capital.
For the full 4Q2010 Office & Industrial Market Report click here:
http://www.bitzerrep.com/pdf/BitzerNewsletter2010Q4[BW].pdf
