While visiting with a Colorado electrical distributor earlier this week we heard that warehouse space is tough to find right now in the Denver metro, in large part due to marijuana growers bidding up prices for industrial buildings.
Several recent reports on the Denver industrial real estate market indicate that this appears to be the case. This from the Cassidy Turley Industrial Market Snapshot:
“Many factors are contributing to this continued increase in rental rates across the market. Among them economic growth causing existing companies to expand to larger spaces, marijuana users willing to pay well above market rates in order to secure space and rising construction costs coupled with lack of space to develop.”
And a post at www.confluence-denver.com said:
“Since voters approved a ballot initiative to legalize marijuana for recreational use in 2012, growers have absorbed more than 1 million square feet of primarily low-quality space throughout 2013, according to the second-quarter industrial Market Trends report by Newmark Grubb Knight Frank.”
The post at www.confluence-denver.com also said Rocky Mountain Barrel Co., a Denver-based importer of whiskey barrels for area brewers, is shopping for new warehouse space but “got outbid five consecutive times, mostly by marijuana growers.”
