Commercial Investment Real Estate
6
July | August | 2015
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O'Connell/Getty
Images
TREND S
MARK E T
Green
A New
Kind of
The cannabis industr y has
transformed Denver's indus-
trial market, according to Avi-
son Young's f rst quarter 2015
industrial report.
The mari-
juana industry added $700
million in revenue to Denver's
economy during 2014, and
2015's projection is approxi-
mately $1 billion. T e overall
vacancy rate for industrial
and f lex buildings fell to an
all-time low of 3.6 percent,
down from 5 percent in 1Q
2014.
Leasing activity was also
up during the f rst quarter, with
2.6 msf leased during 1Q15, a 13
percent increase over last year's
2.3 msf. In addition, rental rates
are up 10 percent YOY, averag-
ing $7.47 psf for 1Q15, the high-
est recorded industrial rents for
the Denver metro. Last year,
commercial real estate company
Xceligent estimated that mari-
juana cultivation and manu-
facturing facilities in Denver
occupy at least 4.5 msf of the
256 msf Denver metro market.
Several large developers are
building an additional 1.6 msf,
with about 21 percent preleased
at delivery at year-end.
With marijuana legal in 23
states, cultivation and sales
created a $2.7 billion economy
in 2014. However, the business
remains a federal of ense, and
properties housing marijuana
activities are subject to seizure by
federal agents. Industry experts
estimate the federal ban will fall
in 2020.
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