Denver industrial building vacancies drops to 4.1% in Q3 2015, with net positive absorption of 763,996 square feet in the third quarter. Vacant sublease space also decreased, ending the quarter at 1,040,923 square feet.
Net absorption for the overall Denver industrial building market in third quarter was slightly lower than second quarter 2015 with 946,454 square feet of net positive absorption, compared to 684,100 square feet in the first quarter 2015. Fourth quarter 2014 had the highest absorption with 2,497,759 square feet.
Flex space recorded net positive absorption of 255,070 square feet in third quarter 2015, compared to positive 134,897 square feet in second quarter 2015, and positive 352,787 square feet in the first quarter 2015, while four quarter ended up with positive 577,560 square feet.
Warehouse buildings recorded net positive absorption of positive 508,926 square feet in the third quarter, a 60% decrease compared to second quarter of positive 811,467 square feet, while first quarter saw positive 331,313 square feet. Fourth quarter 2014 had the highest absorption with 1,920,199 square feet.
Vacancy for the third quarter ended up at 4.1% compared to 4.3% at the end of second quarter 2015, while first quarter 2015 and fourth quarter 2014 remained flat at 4.4%. Flex space reported a vacancy rate of 10.3% in third quarter, which was slightly lower compared to second quarter of 10.8% while fourth quarter 2014 showed vacancy rate of 11.2%. Industrial building space reported a vacancy rate of 2.9% at the end of third quarter 2015, compared to second quarter of 2.9% while first quarter 2015 and fourth quarter 2014 remained flat at 3.0%.
Asking rental rates for the third quarter 2015 came in at $7.82 per square foot which was a 1.7% increase in quoted rental rates from the end of the second quarter 2015, when rents were reported at $7.69 per square foot. Average quoted rental rate for flex space was $10.10 per square foot at the end of the third quarter while warehouse rates stood at $6.82.
Total inventory in the Denver market area totaled 290,214,183 square feet in 10,273 buildings as of the end of the third quarter 2015. A total of two buildings were delivered to the market in the third quarter, totaling 355,840 square feet, with an additional 1,900,361 square feet still under construction at the end of the quarter.