Commercial Market Trends – Q1 2026

The Denver Commercial Real Estate market saw an exceptional first quarter, compared to the past two years, for sales during Q1 2026. The four major property types saw 436 sales during Q1 2026 greater than both the amount of sales during Q1 2025 (307) and during Q1 2024 (382). Year to date transaction volume for 2026 is up 42.02% compared to the same period in 2025! This is driven by lower interest rates, relaxed 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 were 1,464 active & pending listings across the four major property types with 448 retail, 200 multi-family, 435 office, and 381 industrial. It is worth noting that the Denver MSA has 30,605 buildings totaling 898M SF of space. Most of the new construction is in multi-family and industrial with retail growing by a modest amount. 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 perpetually decreasing due to the rise of remote work.

There were 436 closed sales in Q1 2026, which is up from 307 closed sales in Q1 2025. This represents an increase of a whopping 42.02%. The total dollar volume for retail, multi-family, office, and industrial was $1.276B in Q1 2026 compared to $1.565B in Q1 2025, meaning there were more higher volume transactions that occurred in Q1 2025.

Another gauge for demand is net absorption. Absorption is a gauge of the space tenants need to live or operate their businesses. In Q1 2025, Denver absorbed 770,681 SF, but in Q1 2026, we only saw 410,646 SF of absorption. Office, industrial, and retail all lost occupancy while multi-family gained occupancy. Let’s take a look at new construction in the various property types.

New Construction

Developers started construction on 1.7M SF during Q1. This is down slightly from the 2.2M SF started during Q4 of 2025. Retail construction starts accounted for 15,643 SF. Multi-family construction starts were 518,258 SF. Industrial construction starts were 1.2M SF, and office construction starts have yet to be accounted for in Q1 2026 according to the most recent data report from CoStar.

Another factor to consider is the total SF of space under construction. Retail has 618K SF under construction. Multi-family has 8.6M SF (10,721 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 1.4M SF under construction, and industrial has 5.8M SF under construction. All together, there is 16.5M SF of commercial real estate under construction in Denver.

Developers delivered just over 2.4M SF to the market in Q1 2026. This is relatively lower than Q4 2025 and Q3 2025. Retail delivered 41K SF. Multi-family developers completed 1.55M SF. Office demolished (13,166) SF, and industrial delivered 862K SF.

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 98.6M SF of vacancy for commercial real estate. Although this sounds like a lot, Denver has 898M SF of commercial buildings. Therefore, our commercial vacancy rate is 10.98%.

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 2.4% higher than the long-term average. Multi-family is 4.4% higher than the long-term average. Retail is 1.1% below the long-term average, and office is 5.7% 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 3.3% in Q1 2026, none of the commercial property types kept up with inflation, which erodes some value. Retail rents grew 2.58%, and office rents grew 0.85%. Multi-family and industrial rents both decreased at (3.31%) and (2.12%) 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 Q4 2025, but has increased considerably year-over-year compared to Q1 2025. Developers are hard at work building multi-family and industrial properties as well as more SF of office space. We would argue developers are building too many apartments right now which will push up multi-family vacancy and reduce future rent growth and has seemed to have been a trend for the last four years now. Vacancy rates are different among the different commercial property types. Office vacancy has been consistently higher than the long-term average for several years now, mainly attributed to the rise of remote work after the COVID-19 pandemic. 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: