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Page 6 — COLORADO REAL ESTATE JOURNAL — July 1-July 14, 2015
Greater Denver
by John Rebchook
The Denver area retail mar-
ket experienced healthy growth
last year, with the market only
becoming stronger this year.
That was the consensus of
about two dozen speakers who
addressed more than 400 retail
industry officials at the recent
2015 Retail Summit & Expo
hosted by Colorado Real Estate
Journal.
“Looking back, 2104 was real-
ly a landmark year,” said Jon
Weisiger, a senior vice president
for brokerage services at CBRE,
who moderated a broker update
panel at the conference June 11
at the Inverness Hotel and Con-
ference Center.
“All signs are that we are
heading into a vibrant econo-
my,” Weisiger said.
Garrette Matlock, a senior vice
president at Marcus & Millic-
hap, who was on the investment
panel, couldn’t agree more.
“I’ve been in this business for
30 years, over 30 years, and I
have never seen a better retail
environment,” Matlock said.
Denver, he said, used to be
considered a secondary market
but now is considered a first-tier
market.
The overall retail vacancy rate
is hovering around 6.2 percent,
which he said is the lowest in at
least eight years.
Blended retail rent, for all
property types, is about $16.73
per square foot, which is about
$1 per sf, or 6.3 percent, higher
than a year ago, he said.
In the past 18months, the Den-
ver area market has absorbed
about 250,000 sf of space and
there is only about 500,000 sf
under construction, Weisiger
said.
“That actually is a little sur-
prising,” given the demand,
Weisiger said.
It also is a sign that the days
of building the mega-malls may
have come to a close.
“We probably will never see a
giant, 1.7 million-sf Southlands
ever again,” said Allen Lam-
pert, a partner at David Hicks
Lampert.
“A 500,000-square-foot center
is possible at a great intersection
and great rooftops around it,”
Lampert said.
Centers can’t count on the big-
box anchors they did in the past.
“Home Depot will probably
do another store,” and Loweʼs
also is focusing on bolstering its
current stores, rather than build-
ing new ones, he said.
Kohl’s may be one of the few
big-box tenants still expanding,
he said.
Going forward, developers
need to consider that millennials
do not like shopping at cookie-
cutter stores, he said.
Rather, they want the stores
they shop at to be unique to
their markets, he said.
Still, there is no denying that
the retail market is strong.
When Justin Kliewer, a man-
aging director at Newmark
Grubb Knight Frank, was asked
where the hottest markets are in
the Denver area, he said a bet-
ter question might be, “What is
not hot in Denver and along the
Front Range?”
It is hard to find an area that
is not hot, although downtown
Denver and Cherry Creek are
really sizzling, he said.
There are 15 to 20 projects
underway in LoDo and Union
Station, representing more than
200,000 sf of space, he said.
Tony Pierangeli, a senior vice
president at SRS Real Estate
Partners, said a few years ago
landlords primarily were inter-
ested in filling empty space with
any tenant.
Today, demand is so strong
from high-quality tenants that
landlords have their pick of the
litter.
“It truly is a landlord’s mar-
ket,” Pierangeli said.
And while the overall retail
market has a vacancy rate a bit
above 6 percent, Class A space
probably has a sub-4 percent
vacancy rate, he said.
“The biggest challenge is the
sheer lack of opportunity” for
tenants to find space, he said.
The strong retail scene has
attracted the attention of big
real estate investment trusts and
other investors.
InvenTrust, for example, in
April paid $57.1 million for
the 216,325-sf Shops at Walnut
Creek in Westminster.
The $2.5 billion market cap
real estate investment trust is
based in Oak Brook, Illinois.
Michael Podboy, chief invest-
ment officer of InvenTrust, said
he looks at the retail landscape
as an “ecosystem” in which he
bundles things such as the loca-
tion, job market and barriers to
entry in that submarket.
One thing he really likes about
the Denver area is that it is so
attractive to millennials.
“I don’t think we have yet
seen the full power” of that age
group, Podboy said
Other big investment players
on the investment panel, includ-
ing Debbie Godfrey, director of
acquisitions for Ramco-Gersh-
enson Properties Trust; Clint
Marchuck, vice president of
acquisitions for Vestar; and Scott
Holmes, a senior vice president
From left are Tom Hall, McWhinney; Carl Schmidtlein, Galloway; Rick Turner, Kimco Realty; Tyler Carlson, Evergreen; Allen Ginsborg, Newmark
Merrill Mountain States; and Peter Cudlip, Alberta Development Partners.