Denver Commercial Real Estate Market Outlook for 2026 by CBRE

CBRE has recently published its anticipated market outlook for Denver in 2026, providing a comprehensive analysis of the office, industrial, retail, multifamily, and life sciences sectors as the new year unfolds.

In the office market, prime and Class A buildings are expected to maintain their strong performance, with vacancy rates starting to decline slowly after stabilizing at 19.9% and 27.2% at the close of 2025. This decrease in vacancy is predicted to widen the gap between prime properties and Class B and C buildings. Companies are increasingly valuing high-quality office spaces that offer a superior in-office experience and convenient access to amenities for both employees and executives.

New construction in the office market will mainly be concentrated in Cherry Creek, where projects often require significant pre-commitments before breaking ground. Cherry Creek’s appeal lies in its upscale amenities, pedestrian-friendly atmosphere, and robust mixed-use development. Other areas like LoDo, Boulder, and North DTC are also projected to experience a surge in leasing activity due to similar reasons. Rent growth, particularly in prime and Class A buildings in these regions, could reach up to 5% in 2026, while marketwide rental growth expectations stand at 1%-2%.

The industrial market outlook foresees a gradual decline in vacancy rates as the year progresses. Large-scale warehouse buildings are expected to see vacancy rates dipping into the single digits for the first time since 2022. Conversely, vacancy rates in medium-sized properties might stay flat, and smaller buildings could witness slight upticks in vacancy as companies seek better facilities and consolidate their operations in response to changing local economic dynamics.

Speculative development in the industrial sector will remain limited, with the construction of industrial space decreasing from its peak in 2021. The majority of the under-construction space is speculative, with expectations of reduced supply entering the market in 2026. This trend is anticipated to further reduce vacancy rates as the year unfolds.

The flight to quality trend, where tenants favor Class A properties, is expected to persist in the industrial sector. Despite a slowdown in new Class A properties entering the market, there remains ample vacant Class A space for companies to upgrade to.

For owners in the industrial sector, the diminishing supply of new construction and declining vacancy rates are projected to create more favorable conditions by the end of 2026. Tenant preferences for higher-quality spaces and the strong demand for new Class A properties are likely to drive net absorption in big-box buildings. Additionally, there is a growing interest from owner-users in industrial space.

Overall, both the office and industrial markets in Denver are expected to display resilience and adaptability in 2026, reflecting the city’s robust commercial real estate landscape.