The local industrial market has remained stable amid economic uncertainty, but experts speaking at Bisnow’s Denver Industrial Outlook said population growth is needed to make Denver a top-tier market.

“The No. 1 thing that has to change is population growth,” Colliers principal TJ Smith said at the June 30 event, held at Four Seasons Hotel Denver. “Industrial is the tail. We need to fill office buildings. If we don’t get people back to work down here, restaurants close. If restaurants close, we don’t stock our warehouses with food. If we’re not building homes, we’re not filling up yards with roofing materials.”

Denver’s total vacancy rate has remained around 8.6% for the last three quarters, according to CBRE data. And while net absorption declined 83% quarter-over-quarter, the last quarter of negative net absorption was Q1 2010, CBRE’s research team told Bisnow in an email.

Meanwhile, the Denver-Aurora-Centennial metro area’s population isn’t growing as fast as it had been. The region’s population increased by 2.5% from 2020 to 2024, compared to a 6.4% increase from 2016 to 2020, according to U.S. Census Bureau data.

Even Colorado’s annual population growth rate is slowing. The state’s population grew 0.4% in 2025, the state’s lowest estimated growth rate since 1989, according to Colorado Public Radio.

Evergreen Vice President of Industrial Brian Dietz attributed Denver’s slow population growth to the cost of living.

“Denver is the most expensive noncoastal city,” he said, “and you’ve got restaurants that are as expensive as Manhattan. That’s really hard for people to come and move here, and for the service class to continue to live here.”

Smith said he’s had three tenants move out of state due to the cost of local labor.

“We just had a deal that was over 300K SF where the operating expenses were more than the base rent,” he added. “That dog don’t hunt, right? When it comes time, those guys are looking at Reno or [Las] Vegas or Salt Lake [City]. They’re going to go find cheaper space, and so we have to be very sensitive to that, particularly because we don't have population growth.”

On the flip side, there have been “quite a few” investment sales, and “capital partners are slapping 6% cap rates on Denver,” Baron Properties Managing Director Tommy Dirks said.

“[Denver is] still obviously a very appealing and attractive market, but it’s just kind of at a tipping point right now,” Dirks said.

Panelists said population growth is positively impacting industrial markets in places like Phoenix and Salt Lake City.

When projects trade in Salt Lake City, investors show up in “droves,” something that isn’t happening in Denver, Rockefeller Group Director Matt Burns said.

“In Salt Lake, if you remove inbound migration, your natural population growth due to birth rates exceeds the national average,” Burns said. “So investors love it. It backstops the market in a great way.”

In the Phoenix metro, net absorption was down 7.7% quarter-over-quarter but up 7.5% year-over-year, according to CBRE's Q2 report. The Phoenix-Mesa-Chandler metro’s population increased nearly 3.5% from 2020 to 2024, according to census data, and 1.1% from 2024 to 2025, according to the Phoenix Business Journal.

One of Evergreen’s spaces in Tempe, just east of Phoenix, receives several request for proposals, while the company’s project along Pena Boulevard near Denver International Airport receives an RFP every three or four months, Dietz said.

“Even though Phoenix is like night and day, it has gotten harder there,” he said. “I think there’s somewhat of a national slowdown, but Denver, especially, feels slow compared to Arizona.”