CREJ - Retail Properties Quarterly - September 2015

Retail remains steady with a few concerns

Strong retail fundamentals continue in Colorado – positive net absorption, declining vacancy rates and increased asking lease rates, along with - positive employment and population growth. Jason Schmidt from JLL takes an in-depth look at these fundamentals and market statistics on Page 4.

However, there are some concerns that go along with these fundamentals. The Denver retail vacancy rate is the lowest it has been in a decade, according to CBRE, an indicator that supply and demand are unbalanced.

“To get back to an equilibrium, we have to create more new construction,” said Daniel Miller, senior vice president, brokerage and retail services with CBRE. “There is a lot of demand for retail that is chasing few opportunities.” The problem with creating more retail spaces is that construction costs are high. While the successful retail market will keep attracting new tenants, the state may reach a point when national retailers start reconsidering Denver as an ideal location because of limited supply and high construction costs.

Although, fitness centers seem to have no problem finding or building new retail space, paying higher rents and thriving in Colorado. The competition between larger established fitness clubs and new smaller specialized studios is heating up. Find out why fitness is booming in retail centers throughout Denver in the cover story.

Urban infill and transit-oriented projects are having more of an effect on the retail industry at existing and future rail stations. Find out what the challenges and opportunities are for these developments in Tim Gonerka’s article on Page 10.

Proper landscaping and adding park-lets to businesses and retail centers can have a big impact on whether or not customers visit and spend time at retailers. Nicole Stone and James Shaffer discuss these topics on Page 17.

Thank you to everyone who contributed articles, met for interviews and helped create a publication packed with information on the present state of Colorado’s retail real estate market. Without the help of these industry experts, this special section would not be possible.

As you read this publication, please contact me with thoughts about articles and ideas for upcoming issues of Retail Properties Quarterly.

Thanks for reading,