By Ben Reinberg, CEO of the Alliance Consolidated Group of Companies.
Going into 2025, the commercial real estate (CRE) market in Denver is a mixed bag of promise and risk. The city keeps growing, adding new businesses and residents, but there are also challenges in navigating this changing landscape.
Growth will bring many challenges and being informed will be paramount. For stakeholders looking to maximize the available opportunities, it will be important to understand market dynamics, changing tenant preferences, and regulatory changes.
Positive Predictions for Denver CRE in 2025
- Growth in Mixed-Use Development
In 2025, Denver is expected to see accelerated growth in mixed-use developments. As the demand for live-work-play rises, developers are creating spaces that combine work, dining, and entertainment within walkable areas. Mixed-use development has created some of the most vibrant neighborhoods, offering facilities and services right at residents’ doorstep. Developers that can integrate retail, office, and residential spaces into cohesive communities are likely to get strong returns on investment. - Expansion of the Industrial Sector
The industrial real estate market has seen extraordinary growth during the last several years, and there are indications that it will continue to grow into 2025. Since most firms prefer centers nearer the population and need quick delivery, Denver’s establishments make it one of their prime destinations.
Advancements in manufacturing technology are also boosting the industrial sector. Automation and robotics are reshaping industrial facilities, increasing efficiency, and driving demand for flexible, high-tech spaces. - Office Space Reimagined
While traditional office demand has been declining, the good news for 2025 is that office space will be reinvented. Many businesses now crave flexible spaces that fuel collaboration, creativity, and hybrid work models. Denver is at the forefront, pioneering the transformation of old facilities into modern, multifunctional working spaces. That has translated to developers in Denver answering by building in biophilic design, adding outdoor spaces, and offering flexible leasing terms to a diverse pool of tenants. - Investment in Sustainable Buildings
In Denver’s CRE market, sustainability is emerging as a key differentiator, shaping buildings with a focus on environmental responsibility. The push for eco-conscious and sustainable designs is expected to gain even more momentum in the coming years. Developers now see green building initiatives as a great way to reduce bottom-line operating costs and attract environmentally sensitive tenants.
Pitfalls to Avoid in the Denver CRE Market — 2025
- Ignoring Changing Tenant Preferences — Those who lag in the race toward mixed-use and flexible office space might be those owners who do not keep up with the trend. Lack of investment in amenity-rich buildings or those allowing flexibility and hybrid work-friendly environments could lead to longer vacancies or an inability to attract quality tenants. Modern tenants need an environment that is convenient for their well-being and socialization. The landlord cannot avoid this aspect since such actions often mean losing the best rental opportunities. Fitness centers, green open spaces, and even community rooms are some of the considerations necessary to enhance the tenant’s experience.
- Underestimating Changes in Regulations — Looking ahead, Denver is likely to place greater emphasis on sustainability and housing affordability, which could lead to new regulations in the CRE sector. Developers and investors would be wise to navigate potential changes proactively in zoning laws, green building standards, or rental regulations. In 2025, developers will most likely face increased environmental regulations and zoning amendments related to increasing the supply of affordable housing. This can be mitigated by paying close attention to the horizon for upcoming regulations and consulting with a legal professional early in the development process.
- Overleveraging in a Dynamic Market — Higher interest rates and looming economic challenges could intensify financial pressures in 2025. Some investors may find themselves unprepared, risking significant overleveraging to capitalize on growth opportunities. In a dynamic market such as Denver, this will overextend financial commitments to achieve rapid expansion in pursuits that may make an investment vulnerable if market conditions change. Investors should hold healthy cash reserves, diversify their portfolios, and remain prudent about debt exposure.
- Ignoring the Suburban Market — The outlying suburbs of Denver are changing rapidly, with large infrastructure investments in schools and community amenities. With the increase in remote work opportunities, many employees are choosing larger living spaces outside of the city while remaining accessible to the many urban attractions. They should not underestimate the suburban markets with their potential in retail centers, mixed-use development, and residential property.
Ben Reinberg, CEO of the Alliance Consolidated Group of Companies, is a leader in commercial real estate investments who specializes in driving investments into medical, retail properties, offices and multifamily housing in major markets across the United States. The company is on the frontlines of making large purchasing transactions of commercial buildings with a portfolio value at more than $500 million.
