The State of Flex Space in Denver & Centennial
As of Q4 2024, Denver’s industrial market posted 4.3 million sq. ft. of net absorption, underscoring the robustness of small-bay and flex submarkets. Colliers Meanwhile, availability rates for smaller spaces remain extremely tight, with flex units under 25,000 sq. ft. commanding premium rates. Matthews
What that means for Centennial: the ripple effect of Denver’s tight submarkets is pushing demand outward. Buyers and small businesses are actively seeking flex space just outside the core metro, where value and access still align.
Key Trends Shaping the Market
| Trend | Implication for Buyers / Owners |
|---|---|
| Rents Rising in Flex Submarkets | Small units in high-demand pockets are fetching $16–$17 per sq. ft. or more in Denver. Matthews+2LoopNet+2 |
| Limited New Small-Bay Delivery | Developers are favoring large logistics buildings, leaving minimal supply for micro-flex projects. |
| High Investor & Owner-User Demand | Many business owners are shifting from leasing to owning flex condos to lock in control and avoid rent hikes. |
| Lease Renewal Pressure | As landlords push rent escalations and pass-throughs, tenants in leased small business warehouse space will increasingly look to exit leases early. |
Why Centennial Is Poised to Win
Location advantage — Central to the I-25 / E-470 corridor, giving access to both Denver and Colorado Springs.
Land availability — More infill options exist than in inner Denver, enabling flex condo campuses to be built.
Lower entry cost — Slightly lower land, development, and permitting costs than core Denver give earlier buyers better margins.
Business growth spillover — As Denver’s business space becomes constrained, ancillary demand spills into south metro nodes like Centennial.
What Buyers Should Watch Closely
Rent comps for small units — not large boxes. The $/sq ft for 1,000–5,000 sq ft drives your return.
Absorption trends in small-bay — how fast are micro flex units leasing in nearby submarkets?
Construction pipeline for flex — if few small projects are in the works, scarcity may support strong value appreciation.
Lease escalation norms — examine how landlords structure pass-throughs and NNN increases.
Bottom Line for Prospective Owners
If you’re eyeing a flex space ownership in Centennial, you’re entering a market where supply is constrained, rents are rising, and demand is strong. The current conditions favor owners over renters—especially those who buy now and hold.
Want to see how The Garage Den fits into this evolving landscape? Request a Centennial flex space market briefing or schedule a site tour today.
VISIT thegarageden.com for current availability and information on unit reservation and customization!