Warehouse Cultivation Space at a Premium

Warehouses have become the preferred cultivation centers for Colorado’s cannabis industry, and growth of that industry has put a premium on industrial space in Denver.

In Denver, the industrial vacancy rate is currently at 3.1%, which according to brokerage firm Colliers International is the lowest it’s been in decades. The commercial real estate tracking company Xceligent Inc. estimates that the city’s cumulative space used for cannabis cultivation and manufacturing is 4.5 million square feet.

The demand has raised prices. Industrial space in Denver currently rents for $4.74 per square foot on average. That amount represents a 21% increase from 2012, according to Colliers International.

Some cannabis entrepreneurs said that they’ve seen prices as high as $17 to $18 a square foot in some warehouses.

It has also convinced some mainstream property owners to work with cannabis businesses. Brad Calbert, president of the Denver-based wing of Colliers International, said he was initially uneasy about working with cannabis, because “it seemed like a fad.”

“What’s making it sustainable is supply, demand and capital,” Calbert said. “Supply is deficient, demand is excessive and capital is abundant.”

8 comments on “Warehouse Cultivation Space at a Premium
  1. DA on

    I’m surprised the farming community is letting this opportunity pass them by. Wouldn’t greenhouses located on farmland be a viable option that would drastically reduce overhead? I’m surprised they didn’t lobby from the beginning to be allowed to take part in this.

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  2. Mark on

    Greenhouses are not as secure and automated as inside warehouses, plus they have one cycle per year, versus up to 4 cycles per year inside, so inefficient for large scale growing.

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  3. Windy City on

    …as more states join in, the opportunities for available indoor warehouses will expand exponentially as they will learn from these experiences. This will be addressed amicably down the road, I am sure…

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  4. Sicmarc on

    “they have one cycle per year”? Really? Is that what you think? I would suggest you read up on light deprivation and consider the possibility that 5 cannabis crops a year outdoors or in a greenhouse is no big deal if you know how.

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  5. Matthew Kahl on

    I applaud Sicmarc’s dissemination of cannabis knowledge. Plants can only really be grown outdoors for a small period of time (until sexual maturity) unless planted directly into the ground. I grow plants outdoors in recyclable fiber pots until sexually mature (about 2 months from seed), then transport them indoors for a 12/12 flowering cycle. This allows 5 grows per year from seed. Clones are much quicker with a 2 month turnaround.

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  6. Sicmarc on

    Interesting Matt. I do pretty much the opposite. I veg clones to about 2 feet tall indoors and put them outside to flower as that is when expensive lighting, heat issues and massive power consumption comes into play. Doing it my way allows 5 crops a year and very little expense. Light deprivation becomes needed in spring and early summer though or the plants may re-veg before finishing.

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  7. bongstar420 on

    Those prices are absurd. These people really lack what it takes to make it happen. I’m paying something like 0.80/sqft. You can build your own for around a dollar a sqft. Those prices are not actually what other businesses pay. It is just landlords milking their positions as short term gate keepers.

    I can’t see why someone deserves much for owning and paying people to maintain a building.

    Reply

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