Denver industrial market sees slower construction and stronger leasing

Denver’s industrial market is seeing slower construction activity and improving leasing demand in 2026, according to a new midyear outlook report from Marcus & Millichap.

Industrial completions are projected to expand supply by 1.0% this year as developers scale back after several years of elevated construction activity. Leasing activity improved in the first quarter, rising roughly one-third from a year earlier as larger tenant commitments supported northeast Denver and nearby logistics corridors.

“Denver’s industrial market continues to navigate a more selective leasing environment while strong transportation infrastructure and improving investor activity support long-term market stability,” Adam Lewis, senior managing director and market leader at Marcus & Millichap, said.

The report found vacancy is expected to rise modestly this year, though slowing construction and stronger leasing activity are helping stabilize market conditions. North and northeast Denver both recorded year-over-year declines of more than 150 basis points in vacancy rates in the first quarter.

The average lease commitment reached nearly 15,000 square feet during the quarter, with companies including Crusoe leasing northeast Denver warehouse space to produce transportable mini data centers.

Private investors continued to drive industrial sales activity across the metro area. Transaction volume rose about 27% year over year through March, led primarily by private buyers. Warehouse properties accounted for nearly 70% of trades, particularly along the Interstate 70 corridor near Denver International Airport, where vacancy remains below 9%.

Major industrial projects, including Pepsi’s planned 1.2 million-square-foot production facility and Philip Morris International‘s Zyn nicotine pouch manufacturing plant in Aurora, could create additional long-term demand for nearby logistics and warehouse space.

“Denver’s strategic location and evolving industrial base continue to support investor interest as the market works through a period of supply normalization,” Lewis said.