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— Retail Properties Quarterly — August 2017

www.crej.com

State of Retail

Dedicated to Denver.

Through personalized service and unparalleled expertise,

we provide a special kind of banking experience. We offer

commercial and industry lending, SBA loans and commercial

real estate – all with the steadfast focus necessary to help

local business and the community thrive. Stop in and discover

what makes the MidFirst experience truly special.

Cherry Creek

– 101 Cook St.

303.376.3800

Downtown

– 555 17th St.

303.376.5460

University Hills

– 2805 S. Colorado Blvd.

303.376.3840

midfirst.com

A

s any retail broker can

attest, the No. 1 question

we are asked these days is,

“What’s the future of the

retail industry?”

When headline after headline pro-

files another store closure or major

e-commerce takeover, it’s easy to

think that the days of brick and mor-

tar are numbered. Fortunately, the

truth is not so simple. It’s true that

traditional retailers are in crisis, dam-

aged by quickly fluctuating consumer

tastes, technological changes, prices

and competition, but many retailers

have been able to thrive in the retail

market of the future.

In the past, if you wanted to buy

anything, brick and mortar was the

only option for consumers. Today,

with the rise of online and omni-

channel retail – brick and mortar is

no longer an obligation; it’s a choice.

Consumers have countless buying

options, which is unprecedented in

the industry. As a direct result, we’ve

seen historic household names file

for bankruptcy and close their doors

because they weren’t able to keep up

within an evolving industry.

More and more, we’re witnessing

a strong initiative to improve the

customer experience within stores

and restaurants. The e-commerce

platform has challenged retailers to

push the boundaries of what they’ve

done in the past and required them

to truly make an effort to under-

stand their customers. Many retail-

ers now are relying heavily on data

and analytics of the target consumer

to select the appropriate locations

and concepts that will cater to their

customer appropriately. They’ve

become more cre-

ative with in-store

experiences, using

different methods

to draw people in,

whether that is in-

store classes, wine

tastings or green

screens/photo

booths.

Looking ahead,

there are several

reasons to feel con-

fident about Den-

ver’s retail market. We’ve witnessed

a steady increase in population year

over year and have benefitted from

major corporate relocations.

The strong construction pipeline is

indicative of developers’ optimism

for the Denver market. Denver is

poised for growth in our urban land-

scape with neighborhoods like Cher-

ry Creek, the River North Arts District,

Lower Downtown, the Highlands and

South Broadway all seeing increased

invested capital and redevelopment.

Denver’s strong population and

economic growth is continuing to

attract retailers from a variety of

industries, including food and bev-

erage, entertainment, grocery and

fitness. One-of-a-kind projects like

the redevelopment of old industrial

spaces into unique, creative retail

concepts (Central Market, the Source

or Stanley Marketplace) are breathing

fresh life into the market and giv-

ing consumers a new reason to get

excited about Denver’s retail scene.

This repurposing and mixed-use

retail trend shows no signs of slow-

ing down. The suburban landscape

remains bullish and retail is follow-

ing the major housing growth in the

north and south parts of the market.

Grocery-anchored retail remains the

most dominant development oppor-

tunity, especially as power centers

take a back seat while big-box retail

changes course.

To answer the big question: Is brick

and mortar really becoming obso-

lete? The answer is no. In reality,

online purchases today represent less

than 10 percent of all retail spend-

ing, according to the U.S Department

of Commerce’s first-quarter retail

e-commerce sales report. Further,

the majority of online purchases

are goods sold by brick-and-mortar

retailers.

At the end of the day, it’s human

nature to be social, want to feel and

test products, try new restaurants

and visit different shops. The big-

gest change in the retail industry is

the retailers themselves. They are

becoming more sophisticated and

site selection is more strategic.

Retailers are making an effort

to understand their customer and

all of their habits so that they can

react appropriately. In lieu of all the

negative headlines, there are a lot

of retailers and restaurants poised

for growth as they evolve to stay

relevant and authentic. Brick and

mortar is not going away, but rather

it is growing into an experience-

driven art form as consumers con-

tinue to evolve.

Pipeline, employment growth are promising

Cameron Flint

Associate, CBRE

Retail Services,

Denver

One-of-a-kind projects, neighborhoods, shops and restaurants offer consumers reasons

to still be excited about the Denver retail scene.