Paul Hyde came down from his native Minnesota to break ground on his first industrial park along Colorado’s Front Range in the spring of 2018.

So far, one cross-dock building has been completed at 76 Commerce Center, the 122-acre park in Brighton. It’s fully leased with tenants including Walmart. Another building, checking in at 352,000 square feet, is underway and a more than 500,000 square-foot sibling is due to break ground next month.

The park, a joint venture between Hyde’s company Hyde Development and construction giant M.A. Mortenson Co., has a ways to go before hitting its target buildout of 1.8 million square feet of top-of-the-line warehouse and logistics space, but those partners aren’t necessarily biding their time.

Hyde and Mortenson closed last month on a 125-acre property near the E-470 and East 64th Avenue interchange in Aurora. There, they plan to build another 2.2 million square feet of industrial real estate.

“Denver is growing. Whenever you add rooftops and job growth that always drives a demand for more industrial space,” said Hyde, who has also developed projects in Minneapolis and Fargo, N.D.

He’s excited about the prospects for the Aurora property. The partnership is calling it the HighPoint Logistics Park.

“It’s right along E-470 and it’s got a bunch of new housing being built around it that we think is going to supply the labor that serves that park, and that’s so important when it company is picking a location,” he said.

The numbers indicate that the industrial real estate market isn’t just growing in the Denver area, it’s on an extended winning streak. There has been positive leasing activity for industrial space for 18 straight years, said Todd Witty, a vice president with real estate services firm CBRE and part of the team that represented the seller in the HighPoint deal.

According to CBRE’s latest market report, 2.9 million square feet worth of industrial space was soaked up in the Denver area in 2019. That’s down from 4.5 million square feet in 2018. Thirty-five projects were completed last year, bringing 5 million square feet of new space to the market, with another 6.5 million square feet under construction as of the end of the year. Vacancy ticked up over the final three months of the year to 6.6%, according to CBRE, but Witty put that on many projects — like 76 Commerce Center — being built on a speculative basis, without confirmed tenants. Still, spec projects last year were 37% pre-leased when they opened, he said.

Amazon has grabbed many of the headlines when it comes to big industrial transactions in the Denver market in recent years. The e-commerce juggernaut operates four large distribution centers in the metro area — in Thornton, Denver and Aurora — and one Prime Now hub specializing in two-hour deliveries, according to a spokeswoman. It employs 4,000 people in Colorado in packing and shipping jobs alone.

Last week, it announced plans to build an 800,000-square-foot fulfillment center on land it bought from the Colorado Springs Airport, bringing 1,000 more jobs to the state.

Colorado Springs is already home to a 70,000-square-foot last-mile distribution facility for Amazon, said Bob Cope, the city’s top economic development official. Over the last three years, the El Paso County city has also welcomed two large FedEx facilities in the airport-owned business park. At roughly 900 acres, the park offers ample opportunity for companies looking to establish a distribution foothold in a city expected to more than double in population this century. Keeping an eye on industrial growth in Denver, Cope expects his city to follow suit.

“It’s huge any time you have a company like Amazon, a company of their caliber, that makes this kind of investment in the community,” Cope said. “We believe it is going to attract additional tenants to the airport business park.”

But it’s not just web-born companies like Amazon driving the industrial demand in Denver. Marijuana grows and storage have competed for space, a trend seen across cannabis-legal states, according to a recent study from the National Association of Realtors. Industrial hemp is starting to make an impact in Denver, too, according to CBRE.

Consumer demands for convenience and speedy delivery, especially among young adults, are also a potent, market-shaping force, Witty said. Those preferences are driving traditional goods manufacturers like Walmart and mattress maker Tempur-Pedic to chase more industrial square footage close to customers.

The Interstate-70-airport corridor remains the metro area’s core distribution hub and, at more than 87 million square feet of space, its largest by far, CBRE numbers show. But the market boom is driving development in other parts of town.

Last month, Los Angeles-based Cale Enterprises broke ground on a two-building industrial park that is going to bring 142,000 square feet of spec space to Arvada. It is the largest speculative project to break ground in the west metro area in 15 years, according to CBRE, which is marketing the project.

The I-76 corridor is also no industrial lightweight. It has more than 10.5 million square feet worth of space today, with close to another 1 million under construction, according to CBRE.

Paul Hyde credited the brokers he is working with on from Newmark Knight Frank for pushing him to look at the burgeoning submarket when he came to Denver. They knew congestion on I-70 was becoming a major problem for warehouse tenants.

“They said, ‘This is a solution,'” Hyde said last week as he walked around the fast-growing 76 Commerce Center property, “and they were right.”

The ability to circumvent the I-70 expansion project by using the E-470 toll road was another element that attracted Hyde and Mortenson to the HighPoint property. Tenants in Brighton are telling Hyde they would rather pay a toll than have employees making $20 per hour sitting in traffic, he said.

Skipping the Denver congestion was a big selling point for Michael Berman, president of Great Plains Moving and Storage. The company pulled up its stakes in the Mile High City after 123 years to move into 81,773 square feet in the first building at 76 Commerce Center last March.

Great Plains provides traditional moving and storage services for people but also specializes in handling high-value items. Its warehouse can contain things ranging from radiology equipment and computer servers to pinball machines and motorcycles.

“We like the highways out here and how it’s laid out a lot better than central Denver,” said Berman, whose last space was near I-70 and Havana Street.

And the new space has been a great selling point when seeking to hire qualified workers.

“The building sells itself. They come, they see and they say, ‘Oh, I want to work here,'” he said. “It’s warm. It’s comfortable. It’s economical to run.”

University of Colorado Boulder instructor Gregg Macaluso has more than 25 years of experience as a supply chain management consultant and was previously the vice president of supply chain solutions for UPS. He recently toured a 1-million-square-foot distribution center in Pueblo that, after years of operating as a collection point that then delivers goods to retail stores, has now dedicated a third of its space to delivering goods directly to consumers. It’s a reorganization Macaluso said he has seen replicated at least a half dozen times at other large company warehouses across the country.

He chalks those changes up to consumer preferences driven in part by Amazon’s business model. That model puts an emphasis on what Macaluso calls “forward-placed logistics,” distribution facilities that make it possible for “you to get anything you want, at any scale you want and it’s all free” and delivered the next day. The need for that kind of space isn’t just impacting Denver. Other growing cities like Phoenix are seeing the same thing.

But Macaluso, the faculty director for the Leeds School of Business’s supply chain management master’s degree program, has his reservations about the long-term impact on businesses and people.

“It’s not sustainable economically and it’s not sustainable ecologically,” he said.