CREJ - Office & Industrial Quarterly - December 2025
The industrial real estate market is showing signs of adjustment. These changes, centering around rent growth and overall occupancy throughout 2025, continue to amplify due to the national uncertainty surrounding tariffs; however, stabilization may be on the horizon as we work our way through 2026.
According to CoStar, the U.S. industrial market has experienced nearly three consecutive years of rising vacancy rates, resulting in a current national average of 7.5%, which is the highest level in a decade. Net absorption over the past year has also softened, reflecting a combination of supply outpacing demand and ongoing trade uncertainties that contribute to higher market risk (CoStar, November 2025). As a result of these factors, national industrial rent growth has slowed to an average of 1.5% year over year, with quarterly growth currently at -0.1%. Vacancy rates are expected to continue rising in 2026, though they may begin to decline in 2027 as the pace of new supply moderates.
Projecting these national trends into Larimer County, we have continued to see cooling net absorption, and we have also seen continued industrial development project completions. These absorption and supply factors have contributed to an increase in Larimer County’s industrial vacancy rate over the past twelve months, reaching 6.0%, albeit still below the national average (CoStar, November 2025). The annual market asking rent growth in Larimer County peaked at 7.7% in mid-2022 but has since slowed to an average annual growth rate of 0.8%. The current average asking rent stands at $12.08 per square foot.
Another factor that is contributing to Larimer County’s industrial market is that the industrial developers have pulled back the reins on development in recent years, resulting in significantly less industrial space under construction than in the peak of the market. According to CoStar, only approximately 25,000 square feet are currently being built, representing roughly 0.1% of the existing market inventory. If supply continues to remain limited while tenant demand grows, it is likely that vacancy rates in Larimer County’s industrial market will begin to stabilize or gradually decline. As vacancy tightens, opportunities for rent growth are expected to reemerge.
In comparison to Larimer County, Weld County’s industrial market continues to appear strong in 2025. This is largely due to sustained demand for industrial space in this County in recent years, which has resulted in lower vacancy rates and greater opportunities for new development, making the market particularly attractive. Recent growth in Weld County’s industrial sector has likely been driven by robust e-commerce activity and consumer spending, along with population growth in Weld County, creating favorable market fundamentals. Currently, the industrial vacancy rate in Weld County stands at 4.9%, which is well below both the national average and Larimer County’s vacancy rate (CoStar, November 2025). Despite this tight market, average asking rents have declined slightly over the past year, with year-over-year rent growth at -0.4%, bringing the current average asking rent to $12.90 per square foot. While industrial inventory in Weld County has expanded significantly over the last decade, vacancies are expected to remain low as strong demand continues to support the market.
A significant portion of new industrial supply in Northern Colorado is concentrated along the I-25 corridor, as well as in Greeley and Johnstown along Highway 34. NAI Affinity, in partnership with Newmark, is representing Roche Constructors in leasing new construction industrial/flex units within the Highpointe Business Park, located near the southeast corner of Highway 34 and Highway 257 in Greeley. Following the delivery of an approximately 34,000 square foot building within Highpointe Business Park in mid 2023 and the successful lease-up of the entire building, plans are now underway for another building. This building will consist of approximately 31,500 square feet, with anticipated delivery between late 2026 and early 2027.
Strategic projects along key corridors, including I-25, Highway 34, and in business parks like Highpointe, highlights the ongoing evolution of the region’s industrial landscape.
Looking ahead into the coming years, Northern Colorado’s industrial real estate market is poised for a period of measured stabilization. While Larimer County faces higher vacancy and slower rent growth, the limited new construction may help support a gradual recovery. Weld County, on the other hand, boasts lower vacancy rates and strong demand and continues to present attractive opportunities for both tenants and developers. Strategic projects along key corridors, including I-25, Highway 34, and in business parks like Highpointe, highlights the ongoing evolution of the region’s industrial landscape. Overall, with supply growth moderating and tenant demand remaining steady, the market is well-positioned for continued stability and potential rent growth as we move into the next phase of this cycle.
Source: CREJ - Office & Industrial Quarterly - December 2025, "Market update: Northern Colorado looks stable", pg. 20, Lauren Larsen, NAI Affinity