Denver Commercial Market Trends – Q3 2026

The Denver MSA Commercial Real Estate market saw a seasonal increase in closings during Q3 compared to Q2. The four major property types saw 526 sales during Q3 2026. For context, the number of sales during Q3 2025 was 565 and during Q3 2024 was 474. Year-to-date commercial transaction volumes have increased 7.2% when comparing 2026 to 2025. This was primarily driven by more office and industrial sales.

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 1,494 active & pending listings across the four major property types with 452 retail, 230 multi-family, 407 office, and 405 industrial. There are 30,612 commercial buildings in the Denver MSA totaling 901.6M SF of space. Most of the new construction continues to be in multi-family and industrial. The over building of multi-family and industrial in the last cycle has pushed rent growth into the negative. Let’s take a look at demand.

Demand

Demand for commercial space is created by job and population growth. 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. Office demand has been decreasing due to the rise of remote and hybrid work. Many reports show the average office lease today being 30-40% lower than 10 years ago. Denver has one of the highest vacancies in the country for office at 17.9%, but Downtown Denver has a 25.3% vacancy rate.

There were 526 closed sales in Q3 2026, which is down from 565 closed sales in Q3 2025. The total dollar volume for retail, multi-family, office, and industrial was $1.564B in Q3 2026 compared to $1.94B in Q2 2025.

Another gauge for demand is net absorption. Absorption is a gauge of the space tenants need to live or operate their businesses. In Q3 2026, Denver absorbed 4.5M SF, but in Q3 2025 there was 4.3M sf absorbed. Multi-family represented the bulk of it at 2.7M SF. Let’s take a look at new construction in the various property types.

New Construction

Developers started construction on 2.39M SF during Q3 2026. This is down from the $2.98M SF started during Q3 of 2025. Retail construction starts accounted for 287,556 SF. Multi-family construction starts were 2,728,310 SF. Industrial construction starts were 437,246 SF, and office construction starts is currently reported at zero SF.

Another factor to consider is the total SF of space under construction. Retail has 1.1M SF under construction. Multi-family has 10.9M SF (13,466 units) under construction. This is a lot of apartments under construction given the rate of absorption. Office has 962K SF under construction, and industrial has 4.15M SF under construction. Altogether, there is 18.66M SF of commercial real estate under construction in the Denver MSA.

Developers delivered just over 1.9M SF to the market in Q3 2026. This is quite a bit less than the 3.9M SF delivered in Q3 2025.

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. The Denver MSA has 97.4M SF of vacancy for the four major commercial real estate property types. Although this sounds like a lot, Denver has 895M SF of commercial buildings. Therefore, our commercial vacancy rate is 10.9%.

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. Retail is 1.1% lower than the long-term average. Multi-family is 4.3% higher than the long-term average. Office is 5.4% higher than the long-term average, and Industrial is 1.8% 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 3.7% in Q3 2026, none of the commercial property types kept up with inflation, which erodes some value. Retail rents grew 1.08%. Multi-family declined by 0.94%. Office grew by 1.09%, but Industrial declined by 1.58%.

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 the Denver MSA. We have a good supply of properties for sale, but demand has softened. Developers are pulling back from cycle highs, but they are still hard at work building commercial real estate. We believe multi-family is still being overbuilt based on the vacancy rate, absorption, and rent growth. 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. We expect office vacancy to stay higher for the foreseeable future.

Here are links to the market analysis charts for each property type: