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Page 28 — Office & Industrial Quarterly — December 2021 www.crej.com INDUSTRIAL — OUTLOOK NATIONAL REACH, LOCAL RESULTS. 303-657-9700 BDO Denver 303 E. 17th Avenue, Suite 600 Denver, CO 80203 303-830-1120 Accountants and Advisors www.bdo.com © 2021 BDO USA, LLP. All rights reserved. What’s Next? Business resilience is being tested daily. At BDO, our team of experienced professionals provides the knowledge and proactive guidance necessary to overcome the evolving challenges construction facing companies of every size. From ever‑changing tax and reporting regulations, unstable surety and banking markets, to labor issues and unrelenting competition, we’re here to help the clients we serve, wherever they do business. www.bdo.com/construction A ccording to the 2020 U.S. Census, Denver is the fast- est-growing city in Colorado, followed closely by Colorado Springs. Pre-pandemic, both cities had been experiencing steady, yet notable growth, largely due to the region’s appealing outdoor and recreational lifestyle, employment opportunities and business climate, but 2021 has brought a surge of new demand across the entire state. The news cycle has been domi- nated by the need for residential opportunities to meet the demands of a flourishing region, but the need for industrial projects has proven equally important to capture this growth as well as adapt to fast- evolving consumer demands and the active e-commerce marketplace. In fact, the Society of Industrial and Office Realtors reported that “deals are being completed, not stalled,” and leasing activity in industrial has experienced a 30% increase since last year. What’s more, a sec- ond-quarter report shared by CBRE reports a 2.7% direct vacancy rate for distribution space. Needless to say, industrial is showing no sign of slowing down in 2022, and several notable trends this year signal the start of a new era of heightened confidence and interest in industrial development. n All eyes are on the last mile. Retail forecasts show e-commerce will make up 22% of global retail sales by 2023, based on the growing num- ber of e-commerce websites that rely heavily on delivery services. At a time when 41% of consum- ers rank same-day delivery as their most important attribute when shopping online, the last-mile delivery approach has become more relied upon than ever. Dedicated to ensuring a product purchased on an e-commerce plat- form makes it to the consumer in a timely manner, last-mile delivery facilities are strategically developed to be closer to where consumer demand exists. As demonstrated in both 2020 and 2021, there has been a dramatic movement from many urban areas to suburban and developing com- munities. Now, more than ever, the last mile matters, and distribution becomes increasingly decentralized. Amazon is a retail behemoth, and its hub-and-spoke model continues to be adopted by competitors look- ing to secure a location for the last leg of their delivery to service the local population quickly, efficiently and on time. In recent years, com- petitors in the retail market dis- covered unique ways to maintain pace with the likes of Amazon. Best Buy, for example, pivoted 250 of its store designs to become “hubs” to ship more online orders and handle more volume. n Colorado Springs makes its debut. From the industrial development perspective, developers across the state must take note of new trends and shifts in e-commerce. Colorado continues to forge ahead in indus- trial, and development in the state is expanding along the Interstate 25 corridor, becoming less focused on Denver. As the state’s capital and vibrant metropolitan area, Denver always will be a major player, but when looking at active develop- ments, which regions are the most affordable and where residents will enjoy the best quality of life, we see this trending further and further along the corridor, from Fort Collins all the way to Pueblo. Amid the pandemic, Colorado Springs has become a rising star. Not only has it been recognized by U.S. News & World Report, ranking the city as No. 6 out of its 150 “Best Places to Live in the U.S. in 2021- 2022,” but also the city is becoming an attractive destination for both residents and companies alike. A notable catalyst for this increased interest in Colorado Springs is the master plan update to the Colorado Springs Airport, which will “provide the airport with a 20-year road map into the future.” The airport already is seeing an increase in commercial flights and deliveries, as well as visitors and tourists who are com- ing into the Springs directly and bypassing Denver altogether. As the standard of living in Den- ver is becoming increasingly chal- lenging based on incoming demand, Colorado Springs has been a bene- factor of transient growth. From new home developments to nation- al corporations establishing head- quarters, this region is well-posi- Last-mile delivery primes activity beyond Denver Mindy Rietz Development director, Confluent Development Central Park Business Center, a speculative infill industrial park located at the inter- section of Interstate 70 and Central Park Boulevard, represents one of the few undevel- oped infill sites in the market. The site has experienced interest from industrial users looking for convenient access for logistics and distribution throughout the metro area. Please see Rietz, Page 32