CREJ

Impressive market fundamentals strengthen investment activity INSIDE R ecord-low unemployment levels, increased consumer spending and robust resi- dential development have continued to bolster a high- performing retail landscape across the Colorado Front Range.These factors certainly boded well for the region’s retail investment market throughout 2018, and will continue to do so in 2019, as the region remains a preferred market for commercial real estate investors across the capital spectrum due to its proven resiliency. Denver’s retail investment market recorded total 2018 sales volume that exceeded $782.3 million, a 2.9 percent increase year over year. Although a relatively modest increase, this is par- ticularly impressive given macroeco- nomic threats that have disrupted the retail environment and caused choppi- ness in the capital markets. Last year saw strong demand from commercial real estate investors across the capital spectrum for retail assets all along the Colorado Front Range. Investors in the private capital space, which typically consist of high-net-worth individuals, family trusts and private opportunity funds, remained focused on acquiring small- format strip centers and single-tenant net-leased assets that feature service- oriented, invest- ment-grade tenants with locations that possess irreplace- able real estate fun- damentals.These investors often utilize debt financing in their purchases, typically provided by relationship-based lenders such as banks and credit unions. While ample capital allocations existed for these small-format retail investment properties, a supply short- age persisted throughout the year. This imbalance buoyed strong pricing levels due to fierce competition for best-in-class assets, and also resulted in an increase in the number of local and out-of-market investors pursuing opportunity in Colorado’s secondary markets such as Colorado Springs, Fort Collins and Pueblo.The sale of the Shops at Northern, a Class A strip How Sears’ shrinking Colorado footprint is impacting retail real estate across the state. Redefining retail Cherry Creek North’s business improvement district shares statistics from the past year. Community spotlight PAGE 17 Two local restaurants are designing spaces in Denver International Airport’s new Great Hall. Restaurant designs PAGE 14 Please see Page 18 February 2019 Parker Brown Associate, capital markets, national retail partners, CBRE Matthew Henrichs Senior vice president, capital markets, national retail partners, CBRE CBRE One notable transaction that traded in late 2018 was the $30 million sale of the Cherry Creek Retail Center, a two-tenant power center. This was noteworthy because power cen- ter assets have been impacted the most by evolving retail trends, however they typically command desirable real estate fundamentals and offer the entrepreneurial investor an opportunity for higher relative returns that are not readily available in alternative investment products. PAGE 11