Metro Denver’s industrial market is showing two faces. Leasing slowed to a crawl in the second quarter, but investors are rushing back with the biggest quarter of sales since 2022.

Net absorption reached just 80K SF, significantly below the five-year quarterly average of 1.3M SF, CBRE reported in its second-quarter industrial report.

But investors aren’t flinching. Industrial sales volume jumped 67% from Q1 to $717M — more than double the total from a year earlier.

Portfolio deals dominated, led by Clarion Partners’ $119M sale of five airport-area buildings to Principal Asset Management.

The disconnect between the leasing market and capital markets echoes what panelists said at Bisnow’s July Industrial Outlook event. Lenders are back with competitive debt, but equity partners remain cautious, and CBRE’s leasing data appears to back up that hesitation.

“I am seeing a fascinating misalignment in debt appetite versus equity appetite right now,” Confluent Development President Celeste Tanner said at the event.

One of the biggest drags on Q2 absorption was battery-maker Amprius Technologies. The company never occupied its 800K SF lease in the airport submarket, instead listing the building for sublease.

That reversal flipped the airport submarket from Q1’s top performer to Q2’s weakest, with more than 500K SF of negative absorption.

The Amprius move is still just one more addition to the area’s woes. Bisnow reported in July that Swire Coca-Cola had ditched its plans for a 570K SF plant near Denver International Airport.

Not every submarket is struggling. The I-76 corridor posted 353K SF of absorption, thanks in part to Lineage reoccupying space it had left last year and RMS Cranes taking nearly 100K SF. But the overall market picture is one of slowing demand.

Developers are adjusting. The pipeline shrank modestly to 4.8M SF, nearly half of it preleased or build-to-suit.

Projects for PepsiCo and Philip Morris are set to deliver by year’s end, adding 2M SF, but with tenants already in hand. That shift away from speculative building has helped keep availability from climbing even higher.

Asking rents continued their upward creep, hitting $9.72 per SF. But achieved rents dropped more than 13% year-over-year, a sign tenants are finding leverage at the negotiating table.