Retail expansion abounds, despite tough conditions INSIDE Investor demand for Denver area income- producing retail property is thriving Market update Car-centric pandemic retail habits are here to stay; it’s time for real estate to adapt Consumer patterns PAGE 12 Investors are chasing certain single-tenant properties before bonus depreciation sunsets Bonus depreciation PAGE 10 May 2022 PAGE 4 R etail leasing can be like a Rubik’s cube: A colorful, sequence-dependent puzzle that’s rewarding when com- pleted, but requires strategy and determination. There may be setbacks while trying to twist all four sides to display a single color. We can say, tongue-in-cheek, that right now, if you can’t buy a Rubik’s cube, it’s a supply chain issue. If you can’t find someone to help you solve the puzzle, it’s a staff- ing shortage and, if it needs to be fixed, the repair will cost more than expected because materials are increasingly expensive. Of course, these are the chal- lenges that exist today in retail real estate. But despite the stressors, nimble business adjustments based on hard data and ingenuity have yielded industry success. We’re in a healthy business today. WealthManage- reports that retail prop- erties of all types, from grocery- anchored centers to enclosed super regional malls, have experienced a burst of leasing activity over the past 12 to 18 months, noting that, “Even the most pessimistic real estate experts contend that the deal flow reflects the retail industry’s recovery.” Preliminary research data for the first quarter from one com- mercial real estate investment firm indicates that, “Retail tenants absorbed 91 million square feet nationally. The period from March 2021 to March 2022 encompasses the strongest 12-month absorption rate in nearly five years.” But these robust numbers can look out of focus through the tired, vast lens of global developments over the past 24 months. n Supply chain challenges. Con- sumers without an understanding of the supply chain became clear- eyed during the original grocery shortages in spring 2020, including the infamous hunt for toilet paper and cleaning products. The overseas factories and oil refineries we rely on paused pro- duction due to worker illness or, in the case of oil production, a lack of demand for gasoline. At the same Please see Market Outlook, Page 20 Jimmy Balafas Co-founder and managing partner, Kentro Group Amid the significant retail expansions over the last year, there has been a scarcity of junior-box locations. Kentro Group redeveloped a former Office Max and adjacent space into a TJ Maxx/Sierra and sold the property in December 2021.