Economic Snapshot

We read a market that has largely made its peace with higher rates. The curve has normalized, with the 10-year at 4.75% against a 2-year of 4.28%, a positive 0.45-point spread, while fed funds sit at 3.63%. Credit is constructive: high-yield spreads at 2.85 points, the VIX near 16, and the S&P around 7,600 signal ample debt appetite. But the long end matters most for us — a 5.27% 30-year Treasury keeps a floor under cap rates, and 30-year mortgages at 6.58% leave underwriting disciplined.

CoStar's report, dated August 4, puts Denver industrial vacancy at 9.1%, a two-decade high, with trailing 12-month net absorption of 1.5 million SF against 2.8 million SF of deliveries and asking rents down 2.2% to $11.64/SF. Construction has cooled to 5.6 million SF underway, down from the 10.7 million-SF peak in early 2023. On the capital side, CoStar records roughly $2.0 billion in trailing 12-month sales volume, with pricing averaging $168/SF, as institutional buyers stepped back and private, owner-user deals filled the gap.

Where deals pencil today is the small-bay, private-buyer lane CoStar flags — sub-50,000-SF assets in the $1.5-to-$4.5-million range with tight availability — and newer, high-clear-height product still drawing absorption. With CoStar showing a two-decade-high vacancy alongside a normalized curve and firm credit conditions, the buyer-seller gap should narrow as sellers accept repricing.

— Fairbairn Commercial · August 2026