Page 2
— Retail Properties Quarterly — November 2015
CONTENTS
T
he employment market
undoubtedly impacts commer-
cial real estate, and aside from
housing, one of the biggest
beneficiaries is retail. This year,
the state is anticipated to add 45,000
jobs, which will expand headcounts
by 3.3 percent,
according to Marcus
& Millichap’s Retail
Research for the
third quarter.
As these new
employees settle in
and establish homes
in Colorado, they
become consum-
ers and help increase retail demand.
Because of this, we are seeing plans
for new locations and property expan-
sions. The most active retailers, which
led absorption of available space,
include big-box grocery, fitness and
medical retail, including clinics. How-
ever, demand continues to outpace
supply.
For 2015, it is anticipated that net
absorption will be greater than 1.4
million square feet, which will drop
the vacancy rate to 5.8 percent.
“Vacancy has consistently deterio-
rated every year since 2009, while net
absorption has outpaced development
every year since 2010,” said the report.
In an attempt to meet this demand,
500,000 sf of space will be delivered
this year, with preleased single-tenant
assets dominating the completions.
No slowdown appears visible as more
than 3.2 million sf is in the project
pipeline.
“Demand for quality retail space
and the lack of deliveries has caused
developers to consider redeveloping
infill space, especially space geared
toward tenants 10,000 sf and smaller,”
according to CBRE’s Denver Retail Q3
2015 Marketview.
Single-tenant assets are receiving
the most attention from buyers. An
article by Garrette Matlock and Ryan
Bowlby on Page 8 breaks down the
statistics of recent single-tenant and
multitenant sales.
The most sought-after locations
are in the downtown and southeast
suburban Denver markets. Rents
climbed 22.8 percent to $31.44 per sf
downtown and increased 8.3 percent
to $19.06 in the SES. In both areas, sin-
gle-tenant space drove the increases.
The Colorado Boulevard/Midtown
corridor saw the largest rent increase
– $5.99 per sf triple net. This area and
the SES market recorded the lowest
overall vacancy at 2.2 percent. Boul-
der witnessed the largest vacancy
decrease, while the Denver market
enjoyed its 14th consecutive quarter
of positive net absorption, according
to the CBRE report.
Sales to date – at the time of CBRE’s
report – totaled 18 properties and over
$588.6 million transacting. “Year-to-
date totals show heightened retail
investment volume of $987.4 million
compared to $309.5 at this time in
2014,” the report stated.
It will be interesting to see if 2016
can keep pace. Also, I’m interested to
hear what you would like to see cov-
ered in 2016. Thanks to all the authors
who participated and contributed.
And thanks for reading.
