Commercial Market Trends – Q4 2025

The Denver Commercial Real Estate market saw another rampant quarter for sales during Q4. The four major property types saw 525 sales during Q4 2025 compared with 531 sales during Q4 2024 but only 332 sales during Q4 2023. Year to date transaction volume for 2025 is down (1.1%) compared to the same period in 2024. This is driven by lower interest rates, slightly looser lending standards, and increasing economic conditions.

The four commercial property types we are tracking are: retail, multi-family, office, and industrial. It is interesting to look at the Commercial Real Estate Market as a whole and the individual property types. Below is a summary of key details for each property type. Let’s dive into supply, demand, new construction, vacancy rates, and rent growth for Denver Commercial Real Estate.

Supply

There are 1,269 active listings across the four major property types with 389 retail, 183 multi-family, 349 office, and 348 industrial. Throughout 2025, we averaged about 1,295 commercial listings at the end of each quarter. It is worth noting that the Denver MSA has 29,318 buildings totaling 895M SF of space. Most of the new construction is in multi-family and industrial with retail growing by a modest amounts Let’s take a look at demand.

Demand

Demand for commercial space is created by people and businesses using the space. When our population is growing, there is an increased demand for housing and shopping. When jobs are created, there is more demand for industrial and office; however, office demand has been continually decreasing due to the rise of remote work.

There were 525 closed sales in Q4 2025, which is down from 531 closed sales in Q4 2024. This represents a decline of (1.1%). The total dollar volume for retail, multi-family, office, and industrial was $2.58B in Q4 2025 compared to $3.12B in Q4 2024.

Another gauge for demand is net absorption. Absorption is a gauge of the space tenants need to live or operate their businesses. In Q4 2024, Denver unabsorbed (213,719) SF, but in Q4 2025, we saw 132,865 SF of positive absorption. Office and industrial lost occupancy while multi-family and retail gained occupancy. Let’s take a look at new construction in the various property types.

New Construction

Developers started construction on 1.94M SF during Q4. This is down slightly from the 2.23M SF started during Q3. Retail construction starts accounted for 2,500 SF. Multi-family construction starts were 1.08M SF. Industrial construction starts were 859K SF, and office construction starts have yet to be accounted for in Q4 2025 according to the most recent data reports from CoStar.

Another factor to consider is the total SF of space under construction. Retail has 678K SF under construction. Multi-family has 9.1M SF (11,300 units) under construction. This is way too many apartments under construction given the rate of absorption, especially compared to the other property types. Office has 1.53M SF under construction, and industrial has 6.39M SF under construction. All together there is 17.7M SF of commercial real estate under construction in Denver.

Developers delivered just over 1.8M SF to the market in Q4 2025. This is moderately lower than Q3 2025 and Q2 2025. Retail delivered 21K SF. Multi-family developers completed 1.79M SF. Office developers delivered just 3,200 SF. Industrial demolitions actually outweighed the amount of deliveries in Q4 2025 as the net deliveries for industrial properties stood at around (926) SF, meaning 926 SF of demolitions.

Vacancy Rates

A vacancy rate is a metric comparing the amount of unoccupied SF to the total SF of all the buildings in a market. Denver has 97M SF of vacancy for commercial real estate. Although this sounds like a lot, Denver has 895.3M SF of commercial buildings. Therefore, our commercial vacancy rate is 10.8%.

If we are to understand commercial vacancy rates, we need to compare the current vacancy rates to the long-term vacancy rates. Industrial properties are 2% higher than their long-term average. Multi-family is 4.6% higher than the long-term average. Retail is nearly 1.5% below the long-term average, and office is almost over 6% higher than the long-term average! Next let’s look at rent growth.

Rent Growth

Rent growth could be lumped into demand, but it is interesting enough to separate into a new paragraph. Compared to the CPI increase of 2.7% in Q4 2025, none of the commercial property types kept up with inflation, which erodes some value. Retail rents grew 2.43%, and office rents grew 0.78%. Multi-family and industrial rents both decreased at (3.32%) and (2%) respectively.

Final Thoughts

In summary, supply, demand, new construction, vacancy rates, and rent growth are all good key performance indicators for the commercial real estate market in Denver. We have a decent supply of properties for sale. Demand for properties has dwindled slightly compared to Q3, but has grown considerably when you look at both Q2 and Q1 earlier this year. Developers are hard at work building multi-family and industrial properties. We would argue they are building too many apartments right now which will push up multi-family vacancy and reduce future rent growth, which has seemed to have been a trend for the last four years now. Vacancy rates are different among the different commercial property types. Office has been consistently higher than the long-term average for several years now. We expect office vacancy to stay higher for the foreseeable future. Lastly, rent growth has been stalling most prominently for both office and multi-family compared to retail and industrial.

Here is a link to the full presentation for each property type: