by Jason Kruse, Managing Broker – The Colorado Group

As the holidays draw near, brokers, owners, buyers, and tenants across Boulder County are wondering whether Santa will bring gifts or if Scrooge is waiting around the corner. The industrial market is navigating unsettled waters, and several long-reliable industries are showing signs of fatigue.

Industries Losing Momentum

For over two decades, craft brewing has been a cornerstone of the Boulder industrial landscape. But shifting social habits, a push toward healthier lifestyles, and diminished cultural pressure to drink have slowed demand. Multiple breweries are scaling back or shutting down production—pouring (pun intended) industrial space back into the market.

Construction, another major driver of industrial demand, is also cooling. Fewer new housing starts, delayed home improvement projects, and a slowdown in tenant-finish work are weighing on the sector. Add in the lingering effects of tariffs and fewer ground-up projects, and demand for warehouse and production space is weakening.

The Changing Landscape for Small and Mid-Size Industrial Spaces

Boulder County’s industrial “bread and butter” has long been spaces under 50,000 square feet. Smaller suites—those under 5,000 square feet—once leased in a matter of months. Today, landlords face longer vacancy periods, downward pressure on lease rates, and greater need for building improvements to attract tenants.

According to CoStar, 94 industrial spaces between 5,000 and 50,000 square feet are currently available across Boulder, Longmont, Louisville, and Lafayette.

Successful landlords are “white-boxing” their vacancies—updating finishes, improving landscaping, upgrading signage, and introducing amenities to compete in a more selective market.

At the same time, the City of Boulder continues to favor redevelopment of older industrial stock into housing. Several owners have purchased industrial buildings with the intent to redevelop and are only willing to sign short-term leases while navigating the entitlement process. With entitlement timelines stretching up to three years, many of these properties are effectively being land-banked until redevelopment is feasible.

Recent zoning changes have opened additional doors for denser residential or mixed-use projects, but they have also intensified competition. Boulder County is losing tenants to newer, modern industrial buildings in the I-25 corridor, Broomfield, and Westminster—projects offering higher clear heights, enhanced power capacity, superior loading, and modern finishes.

Industrial Sales Market: More Movement on the Horizon

The sales market is also shifting. As loans mature and vacancy rises, more properties are coming to market. Some landlords are even converting industrial buildings into condominiums and selling them off in smaller pieces.

While lending conditions have improved slightly, interest rates and loan terms remain higher than those seen between 2015 and 2020. According to Scott Aylor, Community Bank President at ANB Bank, rates and terms still vary widely based on lease structure, tenant and borrower credit, location, building quality, and leverage.

“For low-leveraged properties with strong guarantors, we have seen aggressive pricing as banks compete to keep quality credits. The lending environment has been turbulent as some sectors see growth while others experience stress. With increased vacancy and pressure on cash flow, landlords are having to come to terms with new market realities,” Aylor said.

Notable Transactions

Several significant industrial sales have closed in recent months:

• 6055 Longbow Drive — Former Leanin’ Tree property sold in early October for $6 million ($38/SF). Buyer Stephen Tebo is now leasing five suites ranging from 10,000 to 171,000 square feet, with rates between $8.50 and $13.50 NNN.
• 2480 49th Street — Sold in late September for $6,095,000 ($190/SF).
• 1860 38th Street — Sold in November to an owner-user for $3.7 million ($259/SF).

With expectations of downward pressure on interest rates, brokers are cautiously optimistic about increased sales activity heading into 2026.

Whether Santa or Scrooge arrives this season depends on one’s perspective. Landlords, lenders, tenants, and investors are all facing the same evolving landscape—but each will experience it differently. As Boulder County’s industrial market recalibrates, opportunity and challenge will continue to coexist, and the outlook will remain, as always, in the eye of the beholder.