CBRE has released its Northern Colorado H2 2022 reports for office, industrial and retail property market performance for the second half of 2022. According to the findings, net absorption reached an all-time high in 2022 for Northern Colorado industrial. The office market saw direct vacancy and lease rates trend flat as available sublease space increased, while retail sales activity remained strong through the second half of the year.
Industrial Highlights
- Nearly 1.1 million sq. ft. of net absorption was recorded in 2022, the highest annual total ever recorded in Northern Colorado that was heavily driven by build-to-suit activity.
- The average direct asking lease rate increased 9.2% year-over-year to $11.55 per sq. ft. NNN as of year-end 2022.
- Total availability and direct vacancy dropped 60 basis points (bps) and 70 bps year-over-year to 5.8% and 4.2%, respectively.
- Over 5.0 million sq. ft. of industrial space was underway as of year-end, marking the largest development pipeline ever recorded in Northern Colorado. The total is heavily skewed by Amazon’s 3.9 million-sq.-ft. facility under construction in Loveland.
- Overall sales volume in 2022 reached $322.2 million, down 24.7% compared to total volume recorded in 2021.
Office Highlights
- Positive net absorption of 3,700 sq. ft. was recorded in H2 2022. The I-25 North submarket led the market for the year, posting 24,000 sq. ft. of positive net absorption in 2022.
- Direct vacancy was unchanged in the second half of 2022, maintaining the 5.2% seen in H1 2022. Year-over-year, direct vacancy fell 60 basis points from 5.8% at the end of 2021.
- Sublease availability increased 18.8% compared to H1 2022’s level, reaching 405,000 sq. ft. as companies continue to determine space requirements and face economic headwinds.
- The average direct asking lease rate increased to $16.34 per sq. ft. NNN, posting a 1.0% increase year-over-year from $16.54 per sq. ft. NNN.
- The development pipeline stagnated in H2 2022, with three completions and leaving only one 5,100-sq.-ft. project under construction. 2022 total completions measured 77,100 sq. ft.
- Investment sales volume totaled $32.3 million in H2 2022, a 7.5% decrease from H1 2022 and a 32.5% year-over-year decline.
Retail Highlights
- Overall sales volume for H2 2022 reached $161.7 million, considerably higher compared to the $42.7 million sales volume recorded a year earlier in H2 2021. Sales volume for 2022 totaled $288.6 million, an increase of 40.5% year-over-year.
- Nearly 117,000 sq. ft. of positive net absorption was recorded in 2022, a 40.2% increase year-over-year
- The average asking lease rate increased to $16.87 per sq. ft. NNN in H2 2022, up 3.5% from mid-year 2022.
- Direct vacancy dropped to 4.2% through the second half of 2022, a 20-basis-point decrease year-over-year.
- Nearly 278,900 sq. ft. of retail space was under construction at the end of 2022, up from just 37,000 sq. ft. underway one year ago.
