Denver's 2026 Commercial Real Estate Outlook (Copy)

2026 Outlook: 5 Companies Answer the Same 8 Questions

As Denver’s real estate market enters 2026, the outlook is less about consensus and more about conviction. We asked five local real estate leaders the same set of questions about where the market is headed: Haroun Cowans, CEO of Goshen Development; Kenneth Monfort, newly appointed CEO of Monfort Companies; Doug Elenowitz, co-founder and principal at Trailbreak Partners; Sean Campbell, CEO of Formativ; and Andy Cullen, managing broker at Tributary Real Estate. Their answers don't always align, and that's part of the value.

Together, the responses reflect a market still working through a reset, with opportunity emerging unevenly across asset classes, submarkets, and strategies.

1. Which product type or asset class in the Denver market do you expect to outperform in 2026, and why?

Trailbreak Partners
High-quality, well-located Class A and A-minus assets acquired at a reset basis are positioned to outperform, particularly late-stage lease-ups or lightly stabilized 2021–2025 vintage properties. Supply pressure is easing. Denver completions are down sharply year over year, and the construction pipeline is clearly tapering heading into 2026. This sets up a more favorable rent-growth environment in 2026 and 2027.
Improvement will likely show up first as less-negative rent trends and improving leasing velocity rather than an immediate rebound. Assets positioned to capture demand as concessions normalize should benefit most.

Formativ
We expect pockets of distress across residential, office, and retail as the market works through oversupply and capital resets. That said, new residential development is likely to rebound first. As deliveries slow and existing supply is absorbed, fundamentals should tighten, especially in well-located urban and in-the-path-of-growth submarkets. We expect rent growth to show up toward the back half of 2026.

Goshen Development
Rental housing is expected to be the top-performing asset class in Denver in 2026, with particular strength in single-family rentals. Toward the latter part of 2026, early signs of recovery should begin to emerge in multifamily as the delivery cycle works through the market and the forward pipeline remains limited. Senior housing and data centers are also asset classes to watch.

Tributary Real Estate (TRE)
The office sector will be the winner. The office market has moved past its lowest point in this post-pandemic cycle in Denver, and with return-to-office mandates taking effect, we expect momentum to continue. We are still seeing a flight to quality, and many companies are looking to expand their footprint as employees return and collaboration needs grow.

Monfort Companies
Well-located experiential retail and hospitality will lead the market. The real winners will be walkable, mixed-use environments that combine food, beverage, programming, and community activation, and that can operate profitably even before a full recovery takes hold.

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2. What is one misconception about the Denver real estate market heading into 2026 that you think needs correcting?

Trailbreak Partners
Denver’s prominence has cooled from the outsized growth years, but that does not mean the opportunity has disappeared. The primary challenge was supply hitting the market at a record level in a concentrated window. As that supply rolls off, the opportunity is less about hyper-growth and more about normalization in a fundamentally healthy market.

Formativ
There is still a narrative that downtown Denver has a major health and safety issue, and that does not match what we see day to day. Downtown feels more vibrant and active than it has in years, with more people back in the office and renewed energy across key corridors.

Goshen Development
The bigger misconception is what comes after 2026. There’s been a lot of focus on lagging data and recent deliveries, but not enough attention on what the market looks like 24 to 36 months out. The forward development pipeline is smaller, and the real question is what that means for inventory, affordability, and future rent growth.

TRE
That office rents are down across the board. Rents in both newer and older buildings have largely held steady, even as some buildings trade at deep discounts from prior purchase prices. Many new landlords are investing in buildings while holding or pushing rents higher.

Monfort Companies
That Denver functions as a single market. Submarkets like Cherry Creek, LoHi, RiNo, and select downtown pockets operate more like different cities. Micro-location, tenant mix, and activation matter more than ever.

3. How do you see construction costs and labor availability evolving in Denver this year, and how will that impact new development and supply?

Trailbreak Partners
Costs are expected to remain steady to modestly higher. Some material and trade costs have come down, but labor availability remains constrained, impacting timelines. The result is fewer new starts, more delayed or phased projects, and continued creativity in capital stacks. These dynamics support the view that the supply wave is already ebbing.

Formativ
We expect construction costs and labor availability to stay relatively flat through 2026 because confidence in new development is still limited. Once confidence returns and more projects move forward, we expect more typical annual cost increases in the 2 to 4 percent range.

Goshen Development
Construction cost data remains mixed. A slowdown in development has eased some pricing pressure, but labor availability continues to be a challenge. Maintaining a strong skilled workforce during slower periods is critical so Denver can respond efficiently when development activity increases again.

TRE
Construction costs are expected to remain high, with tariffs, labor shortages, and material costs continuing to pressure budgets. While costs may not rise as sharply in 2026, we don’t expect them to come down in a meaningful way.

Monfort Companies
Construction costs are still rising, but at a more moderate pace than earlier cycles. Labor availability has been steadier than many expect, though operating labor pressures remain real, especially in hospitality with Denver’s minimum wage increasing on January 1, 2026. These dynamics are driving fewer speculative starts, more phased development, and more emphasis on adaptive reuse.

4. What major risk do you think Denver real estate stakeholders are underestimating as we enter 2026?

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Trailbreak Partners
The refinancing wall colliding with the reality of effective rents, especially with uncertainty around Proposition 1090. Even as occupancy improves, concessions can keep effective rents and NOI below expectations while lenders underwrite conservatively. Where distress emerges, it’s likely to matter.

Formativ
Broader capital market confidence and macroeconomic stability. Inflation trends, employment data, credit performance, and the number of assets heading back to lenders will shape how 2026 plays out.

Goshen Development
Underestimating the longer-term outlook. Without projecting 24 to 36 months ahead, stakeholders risk being unprepared for future constraints, especially as Denver competes for workforce talent and new businesses.

TRE
Denver’s growing perception of being less business-friendly than competing cities. Regulatory complexity, taxes, affordability, and policy uncertainty are increasingly influencing where companies choose to locate or relocate.

Monfort Companies
A prolonged grind in fundamentals while debt remains restrictive. Assuming rates will fall quickly and refinancing will be easy can create serious exposure, especially for assets with near-term maturities.

5. How are local capital markets and lending conditions in Denver changing the way deals are being structured or underwritten?

Trailbreak Partners
Underwriting has shifted toward effective rents after concessions and higher economic vacancy assumptions. Traditional bank construction lending is less available, pushing sponsors toward debt funds and non-bank lenders. Bridge-to-agency remains a practical path in multifamily. Equity has become more complex, with some capital avoiding Colorado due to regulatory uncertainty.

Formativ
For ground-up development, equity remains the hardest part of the capital stack. Lenders are active, but terms favor lenders with more conservative underwriting, higher spreads, and tighter covenants. This puts more emphasis on strong sponsorship and long-term value versus short-term speculation.

TRE
Banks are largely not lending into downtown assets, and limited equity is forcing sellers to offer historically low pricing. We expect continued tighter underwriting, lower leverage, more recourse loans, and a focus on stabilized assets. Deals will require more equity, creative capital stacks, or seller support.

Monfort Companies
Lower leverage and higher equity requirements, especially for volatile income assets. Also, more creative structures like preferred equity, rescue capital, seller financing, earnouts, and milestone-based funding tied to leasing or performance.

6. Are there specific submarkets or neighborhoods in Denver you believe are being overlooked heading into 2026?

Trailbreak Partners
Infill and urban submarkets, particularly Five Points, Capitol Hill, and Cherry Creek. These areas are leading the supply slowdown with materially fewer units slated for delivery than prior years.

Formativ
Downtown Denver continues to be overlooked despite improving fundamentals and long-term positioning. We also see opportunity in South Denver and first-ring suburban markets with strong infrastructure, connectivity, and demographics.

Goshen Development
Arapahoe Square and Five Points. Both offer high-density zoning and underutilized sites, but success depends on improving connectivity to downtown and aligning infrastructure and public realm investment.

TRE
Downtown Denver’s office market, particularly the CBD near the Capitol. Perception remains negative, but fundamentals and activity have improved, creating opportunity at current pricing.

Monfort Companies
The “in-between” neighborhoods near established nodes but still trading at a discount, including the ballpark area. These require intentional placemaking but offer basis, runway, and upside for patient, hands-on investors.

7. What is the single most important signal or data point you are watching in early 2026 to guide decision-making in Denver?

Trailbreak Partners
Concessions, both their depth and how widespread they are, alongside effective rent trends relative to deliveries and absorption. The turn should show up first through concession burn-off.

Formativ
Inflation, along with broader indicators like employment trends, consumer confidence, and credit performance that influence how aggressively capital returns.

TRE
Net absorption in the Denver office market. It shows whether tenants are actually leasing and whether availability is starting to decline.

Monfort Companies
Cost of capital relative to real income growth, including where SOFR and Treasuries settle and how lenders translate that into proceeds. On the ground, consistent foot traffic and repeat visitation in the urban core.

8. What was your most meaningful win in 2025?

Trailbreak Partners
Successfully refinanced out of two construction loans and broke ground on KAIA, a 295-unit multifamily project at 8th and Lincoln, timed to deliver after the supply storm clears.

Formativ
Continuing to move forward with development in Denver when very few others are, including breaking ground at 38th and Blake and Walnut and progressing Denargo Market.

Goshen Development
Revitalizing 2550 Washington Street in Five Points with an emphasis on affordability preservation, cultural activation, and sustainability, plus building momentum toward new construction at 2000 Welton Street.

TRE
Launching the investment side of our business and introducing the TRE brand, allowing us to participate directly in opportunities and better align with clients.

Monfort Companies
Advancing multiple projects, strengthening capital relationships, and continuing to build an institutional-quality platform while staying committed to Denver’s urban core.

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Taken together, these responses point to a Denver real estate market that is no longer defined by a single narrative. Instead, 2026 is shaping up as a year of selective recovery, uneven opportunity, and disciplined execution. Supply pressures are easing, capital is more cautious, and underwriting assumptions are tighter across the board. The next phase will reward sponsors who understand micro locations, manage leverage carefully, and are willing to operate through a slower, more incremental recovery rather than chase a rapid rebound.

What stands out most is not broad optimism or pessimism, but conviction. Whether it is rental housing, office, experiential retail, or overlooked urban submarkets, opportunity in Denver remains very real for those aligned with the right product, basis, and time horizon. As the market continues to reset, 2026 looks less like a turning point and more like a proving ground.

Special thanks to Sidecar PR for assisting with outreach and helping collect responses from the participating companies.