Despite headwinds, CO retail remains resilient INSIDE Suburban cities continue to grow, bringing shoppers with them. 'Burbs draw shoppers Modern innovation will revitalize the retail shopping experience. Construction trends PAGE 16 Cap rates for single-tenant net-lease properties are coming off of record lows. STNLs are tops PAGE 8 May 2023 PAGE 6 T he retail sector of commer- cial real estate in Colorado continues to demonstrate resilience and growth in the first quarter of 2023, despite some headwinds in the broader national economy. According to CBRE research, the Denver metro retail market posted over 342,000 square feet of net absorption in first-quarter 2023, which marked the eighth consecutive quarter of positive net absorption. Additionally, direct vacancy dropped by 20 basis points quarter over quarter to 6.1%, while availability decreased by 90 basis points to the same rate. The retail construction pipeline in the Denver metro area continues to remain muted with just 662,000 sf in the first quarter of 2023. A total of nine projects comprising just over 197,000 sf were delivered in the first quar- ter, more than double the total volume delivered in fourth-quarter 2022. However, delivery volume is largely being driven by precommitted national big-box retailers, and spec- ulative retail construction remains low in the metro area. The Denver metro area contin- ues to attract pre- committed national big-box retailers, and retail avail- ability rates con- tinue to decrease due to strong ten- ant demand. This trend is mirrored on the national level, where deliv- eries of new retail space remain at record-low levels. The sector funda- mentals will con- tinue to benefit from this supply and demand imbalance moving forward. In contrast, retail investment sales volume fell sharply to $196.7 million in the first quarter of 2023, a 43.8% quarter-over- quarter decrease. The largest portfo- lio to trade in the first quarter was the Parker Key- stone development, which consists of 22,108 sf of retail space and traded for $11 million. In the face of high Please see Market Update, Page 19 Brad Lyons Executive vice president, CBRE National Retail Partners – Mountain Matthew Henrichs Senior vice president, CBRE National Retail Partners – Mountain Parker Brown First vice president, CBRE National Retail Partners – Mountain Average Asking Lease Rate Vs. Direct Vacancy