Start with the disagreement
Ask five research teams for Denver's industrial vacancy rate at midyear 2026 and you will get five answers. Cushman & Wakefield put overall vacancy at 7.8%. Matthews reported 9.2%, Cresa 9.3%, and Savills 9.6%. The gap is not an error. Each firm tracks a different inventory, draws submarket boundaries differently, and treats sublease space and owner occupied buildings in its own way.
For anyone relying on an appraisal, that spread is the first lesson of this market. A vacancy assumption is only as good as the data behind it, and a sound report should say which data it used and why it fits the subject property.
What the midyear numbers say
Read together, the second quarter reports describe a market that is still soft but no longer deteriorating quickly.
- Vacancy is elevated and roughly flat. Cresa characterized vacancy as the highest in more than twenty years. Savills reported vacancy slightly lower than a year earlier, but noted that nearly 600,000 square feet of negative net absorption in the second quarter erased the improvement from the first. Cushman & Wakefield showed vacancy unchanged from the prior quarter.
- Asking rents are drifting down. Savills reported average asking rents of $8.75 per square foot, down about 2% year over year, with the East submarket averaging about $7.52.
- Leasing takes longer. Matthews found that average lease up time rose from about 5.1 to 6.2 months over the past year as tenants take more time to decide.
- New supply has slowed sharply. CoStar data summarized by Innovate Commercial Real Estate shows about 5.7 million square feet under construction, down from a peak of 10.7 million in early 2023, with starts over the past year down roughly 70% from 2021. Savills counted about 600,000 square feet delivered in the first half of 2026, roughly 1.1 million fewer than the same period in 2025.
The softness is not evenly spread
Metro averages hide the real story. The same CoStar summary shows vacancy near 14% in buildings of 100,000 to 250,000 square feet, the size range where the most recent construction delivered, and more than six hundred thousand square feet of unleased speculative space still due this year. It also shows older buildings, those built before 1980, losing about 1.7 million square feet of occupancy over the past year while newer product held up better.
For valuation, that means the right comparison set matters more than usual. A 1970s building with low clear heights and a modern 180,000 square foot distribution building are not in the same market, even if they sit in the same submarket.
More properties are coming to market
Matthews reported that industrial listings rose from 424 in the first quarter to 538 in the second, the most on record, and pointed to maturing loans originated between 2019 and 2022 as one driver. It also noted that the gap between buyer and seller pricing has started to narrow.
That has two consequences for appraisals. First, refinance and loan renewal assignments rise as those loans mature. Second, the sales record now includes more transactions from motivated sellers, so every comparable sale needs its conditions of sale verified before it is used.
What this means for an industrial appraisal today
- Lease up and downtime assumptions should reflect current evidence. Longer marketing periods flow directly into downtime, free rent, and the discount between as is and as stabilized value.
- Rent growth in a cash flow model should be supported by the property's size segment and submarket, not a metro average from a stronger year.
- Functional utility deserves real analysis. Clear height, loading, and truck court depth increasingly separate buildings that lease from buildings that sit.
- Market data sources should be named and reconciled, given how widely published vacancy figures differ.
What to watch in the second half
With construction starts down sharply, the supply side of the equation is improving. The questions for the rest of 2026 are whether tenant demand turns consistently positive, whether rents stabilize in the size ranges that saw the most new construction, and how many maturing loans lead to sales rather than extensions. The next update will follow third quarter data.
Market figures are from third party research published for the second quarter of 2026 and differ by methodology. Sources: Cushman & Wakefield Denver MarketBeat; Savills Denver Q2 2026 Industrial Report; Matthews Denver Industrial Q2 2026; Cresa Denver Industrial Q2 2026; Innovate Commercial Real Estate, Denver Industrial (CoStar data). This article is general market commentary, not an appraisal of any property.