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October 2019

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Denver, CO

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150,245 SF

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Havana 37 Business Center is a 3-building, 150,245 sf multi-tenant industrial property currently 90% leased to 12

tenants ranging in size from 2,500 – 21,000 square feet. Building 100 and Building 200, roughly 28,000 sf each, are

rear loaded with a mix of dock high and grade loading and sit along Havana Street. Building 300 sits on the north of the

site and is a 94,208 sf building with dock-high loading.

Havana 37 Business Center is located on the I-70/I-225 corridor in the Central E I-70/Montebello industrial submarket

(currently 3.4% vacant). The seven-acre site is located less than a mile from I-70 to the north and I-225 to the east.

Interstate 70 is a main east-west artery that extends all the way from Utah to St. Louis, Missouri and is highly traveled

by commercial vehicles transporting goods across the midwest. I-225 is a loop, diverging from I-25 near the Denver

Tech Center and extending through Aurora, where it intersects with I-70. The property’s proximity to these two major

arteries, along with Denver International Airport and Downtown Denver being located 9 miles away, provides an attractive

advantage for tenants looking for strategic connectivity to the city’s commercial hubs.

Havana 37 Business Center was developed in 1973 and has operated as a light industrial property. The property is highly

functional with 14-20 feet of warehouse clear height, ample dock and grade loading and a parking ratio of 1.05/1,000 sf.

The current office buildout is 23%, ideal for tenants utilizing the space to accommodate regional distribution while easily

drafting off the local labor force.


A confluence of events has led Denver to become one of the hottest industrial markets in the country. Robust demand in this regional market with a strong local economy is stemming from the growth of retail sales, employment, and industrial production in the metro area and the greater Colorado region. Furthermore, the rise of the marijuana industry with the passing of amendment 64 in November 2012 created an additional demand segment, with new and relatively unsophisticated tenants operating with entirely different profit margins. 

Overall, the market is uniquely strong. Industrial rents were nearly 60% above the peak of last cycle at the onset of 2019, and rents continued to grow at an annual rate upwards of 6% on the year. Rents have continued their climb upward, with nearly every submarket seeing an increase this quarter. I-70 reconstruction is pushing demand northward, while the Southeast submarket’s increasing activity is bleeding over into the neighboring Southwest submarket. The Northeast submarket saw 5.1 percent rent growth, while the Southeast recorded a 2.9 percent gain. Vacancies remain tight and significantly below the historical average, even if they have come off of the historically tight conditions that prevailed several years ago. Over 5 million SF delivered in 2017, by far the most this cycle, and around 4.5 million square-feet on average is slated to deliver in 2018 and 2019. 

And the volume of speculative construction has never been higher: The amount of available space at under construction logistics properties (the warehouse and distribution industrial subtypes) edged over 3 million square feet in late 2018, twice the year-end 2017 amount, and well above an earlier cyclical peak of 2.3 million square feet in early 2016. That figure is down slightly this year, as some larger spec projects have delivered. 

Sales volume topped the $1.5 billion mark early in the fourth quarter of 2018 and closed the year at around $1.8 billion. This eclipsed the previous all-time high recorded in 2016 by nearly 50%. Same-store industrial pricing increased at an annual rate north of 10% for a sixth consecutive year. 


Moving into the second half of 2019, both the availability and vacancy rates in the submarket remained are near all-time lows. The vacancy rate edged up in early 2019 following a large move-out: A 172,400 SF building, located in the Denver Business Center, was vacated early in the year. The space had been on the market since mid-2018, when former tenant GE Appliances signed on for just over 350,000 SF at Nexus DIA. Nexus DIA is a brand-new building just northeast of the Rocky Mountain Arsenal National Park, in immediate proximity to the Denver International Airport. 

Speculative development over the past several years has been limited to a single 163,000 SF building that delivered in early 2016. In June 2017, just over a year after delivering, that building secured a lease from Wesco Distribution for about 80% of the space. The remaining 27,000 SF was leased by Communications Supply Corporation (a subsidiary of Wesco) in April 2018. 

Given the current absence of speculative projects in the pipeline, tight conditions look set to persist in the near term. As of mid 2019, rents in the Cent E I-70 Submarket had surpassed last cycle’s peak by just over 60%, slightly better than the metro-wide average, which itself represents the best performance nationally outside of East Bay and San Jose. While the historically tight conditions of 2014 and 2015 have loosened by fractional amounts, vacancies remain well below long-term averages (and below any point achieved last cycle). Industrial owners continue to wield substantial pricing power.