As the major cultural hub of the Rocky Mountains region, noted for its strength in the aerospace, telecommunications, and technology industries, Denver’s commercial real estate market has attracted significant attention from accredited investors. The Mile High City and Colorado capital has enjoyed considerable GDP and population growth in recent years, fueling demand across several sectors—office buildings, industrial facilities, and multifamily housing. These strong fundamentals, combined with a diversified economy, make Denver a standout market in 2025, though recent shifts in interest rates and work patterns are tipping the scales of opportunity and risk.
What does Denver real estate investing look like in 2025? Let’s jump into some key market trends.
Denver’s Economic Fundamentals
Denver’s economic backdrop has been a large driver of its real estate appeal. The metro area has added over 430,000 residents since 2010 (about 15% growth), reaching nearly 3 million people. With employers such as Lockheed Martin, Amazon, and Comcast, job creation has been strong across industries like technology, aerospace, healthcare, and finance, helping to boost the region’s GDP to roughly $311 billion in 2023 from $164 billion in 2013. Unemployment hovered around a low 4.6% as of December 2024, reflecting a tight labor market and healthy consumer spending capacity. These growth trends have spurred development and kept demand resilient, even though rising interest rates and inflation have posed broader economic headwinds.
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Key Market Trends
Across Denver’s commercial real estate sectors, trends vary by property type. Here are a few notable opportunities and challenges:
Office
As of Q4 2024, sublease availability has continued a downward trend, and new development has tapered off. Meanwhile, office vacancy remains high (around 24.9%). Thankfully, CBRE states that they are “cautiously optimistic” regarding Denver’s office market, seeing “signs of positive economic momentum in 2025”: they note that there have been two consecutive quarters of positive absorption (total net absorption of 167,000 square feet) and higher leasing activity overall, marking a shift toward stabilization.
Industrial
Overall vacancy in Denver’s industrial market decreased to 7.4% after the construction pipeline began to tighten, allowing demand to catch up to the current supply. Cushman & Wakefield notes that sales activity rebounded strongly at the end of 2024 as a result of lower interest rates, indicating “cautious optimism” for investor spending habits throughout 2025. The firm also predicts that the vacancy rate could remain flat or “improve further” throughout 2025.
Multifamily
As of January 2025, Denver’s multifamily market was experiencing a slowdown in new construction due to high interest rates and rising costs, following an oversupply of urban apartments in 2024 that led to rent declines and increased concessions. While suburban markets thrived and attracted nearly $5 billion in investments, urban developments have stalled, partly due to policy challenges like the Inclusionary Housing Ordinance and Energize Denver program. Experts warn that today’s pullback in development could lead to future rent spikes as demand outpaces supply. However, these same experts remain optimistic about Denver’s fundamentals, with some expecting urban areas to rebound as work-from-home trends shift and downtown’s appeal resurfaces.
Investment Insights for Accredited Investors
With vacancy declining and demand catching up, Denver’s industrial properties may be worthy of consideration as an accredited investor. Investors could target last-mile distribution centers, cold storage facilities, and flex industrial spaces as e-commerce and logistics continue to drive demand—in fact, e-commerce was recently named as one of Colorado’s fastest-growing sectors.
The urban multifamily market, by contrast, faces headwinds, but suburban areas have attracted significant investment. Investors might focus on value-add opportunities in urban locations while keeping an eye on suburban developments benefiting from demographic shifts. Long-term, a slowdown in construction could lead to rental growth as supply tightens.
Market conditions underscore the importance of asset selection. Offices, for example, present a mixed picture: newer, amenity-rich buildings are capturing tenants, whereas several older downtown towers are grappling with high vacancies and loan distress. Investors may find value-add opportunities in repurposing or recapitalizing these underperforming properties, but should be prepared for leasing challenges.
Overall, Denver remains a compelling market for accredited investors. The city’s economic vitality and demographic trends provide a solid foundation, while current market adjustments offer both cautionary tales and strategic openings. If an investor stays attuned to local trends and maintains disciplined criteria, they can position themselves to capitalize on Denver’s evolving commercial real estate landscape for years to come.
