Denver Industrial Space for Lease and Purchase- Breakdown

01/01/2014

Informative look at both the features and geographies of Denver industrial space to lease.  

While Denver’s industrial space for lease market is dwarfed in comparison to the likes of the coastal cities, there are still plenty of buildings nearby.  This is a breakdown of the following hubs of manufacturing, distribution, and warehousing in Denver, Colorado. 

To be expected, the Denver industrial space to lease is centered on transportation corridors.  Interstate 70 (I-70), Interstate 25 (I-25), Santa Fe (Hwy 85), and Interstate 76 (I-76) are within a stone’s throw from the majority of the square footage in Denver.  For the purpose of this article, we are going to break the market up into several major categories to give you a little detail on each zone. 

Denver Industrial Space for Lease

Denver Industrial Space to Lease Zones:

Santa Fe Drive/ Highway 85- South of Colfax, North of Belleview

Easy access from Littleton to central Denver.  Moderately priced rents with a mix of older and newer product. 

Rent is near $6, vacancy is near 17%, 2.5 million square feet total

East I-70/ Stapleton to 470

The development of the former public lands in Stapleton has certainly changed the landscape of this side of town.  Lowest rents in the area.  Great if you need direct East/ West access.

Rent is near $4, vacancy is near 22%, 10 million square feet of space total

Central Denver- I-70/ I-25/ I-270 Intersection

Easy choice if you need a distribution hub.  Access to transportation in any and every direction.

Rent is near $4.50, vacancy is near 18%, 6 million square feet of space total

West I-70/ I-76 Corridor

Smaller submarket in terms of square footage, but certainly a heavily trafficked corridor.  Highest vacancy of the bunch. 

Rent is near $7, vacancy is near 28%, 1 million square feet of space total

Centennial

Highest rents due to the expensive dirt in the Southeast market.  Consider the rent a convenience tax for the companies that need a southeast location. 

Rent is near $9, vacancy is near 14.5%, 1 million square feet of space total

To view a map of these Denver industrial space submarkets, follow this link. 

Clearly all of the Denver industrial space to lease is not contained within these zones, but certainly the majority of it is.  Lakewood, Arvada, Westminster, and a few other areas also contain their fair share of warehouses and other industrial properties. 

Denver Industrial Space for Lease Features

The major issues to consider when picking a property are probably obvious to you, but it can often be tricky trying to bring together the proper combination of these elements so a building works for your business. 

Clear heights or ceiling heights.  These can be found as low as 10 or 12 feet in older Denver industrial spaces for lease.  The advantage here is having a lower utilities expense.  The disadvantage comes in needing to stack products or equipment to a certain height, or storing vehicles of a reasonably large size.  Newer construction clear heights range from 16 to 24 or even 28 feet.  Occasionally a building will go higher than that if there was a certain special use in mind that needed excessive amounts of clearance. 

Doc high and drive in doors.  Somehow it seems whenever you need 2 drive in doors, there are always 2 doc high doors instead on the property in question and the other way around.  Typical heights on doors are 8 to 12 feet.  One would think it is easy enough to increase the size of doors as need be, but sometimes this can be more expensive than you would hope.  The track and equipment utilized in an overhead door may need adjustment or replacement.  Additionally, certain building materials may be much less expensive than others to cut.  Expect these additional construction costs incurred to have some impact on your ability to negotiate the price down significantly or sign a shorter term lease. 

Insulation.  If you plan on heating and cooling your space year round, industrial properties can be poor at keeping energy efficiency down due to the conductive building materials.  Be sure to look around for signs of insulation, especially at points with high potential for energy loss/gain. 

Ventilation.  One of the easier tweaks to make if you find a Denver industrial space to lease that is not ventilated as required by your specifications.    

Sprinklers.  You know who you are, but according to internal or external regulation, many companies are required to make sure their equipment or inventory is properly protected with a sufficient sprinkler system.  There are dry and wet variations available, so if your equipment can be easily damaged by one or the other, be sure to get the specs on the property’s systems at a very early stage. 

Outside of the above referenced features of the properties themselves, there is one other pressing issue to address.  Everyone knows the age old real estate mantra about location and in industrial, location has the biggest impact on logistics.  If your shipments all of a sudden become much less expensive because you have a direct route to your destination, or if the labor cost in one Denver industrial space submarket is 15% lower than another, your bottom line is going to see a big long term impact.  One might think the impact these costs will have would affect your bottom line more significantly than the cost of simply paying an extra $1.50 per square foot per year to be in the right location.  Certainly this is a generalization and you would need to crunch the numbers on your actual situation.  At the end of the day, you are looking at 4 rather inexpensive walls on rather inexpensive dirt.  The real trick to looking for Denver industrial space for lease is to look at the effect it will have on your bottom line rather than simply the impact it will have on your real estate expense. 

If you have questions about thinking through your own personal situation, feel free to contact us here.  Remember, real estate is more than just a line item on your financials, it is an area where you can gain a strategic advantage over your competition.