Colorado-Real-Estate-Journal_372209

Local market remains strong amid rising rates INSIDE Large is out, and smaller, more economic developments rule the day Retail evolution Retailers who do not embrace AI will be at a competitive disadvantage AI revolution PAGE 15 November 2023 PAGE 8 T he retail real estate market in metro Denver continues to outperform the national market, according to new reports from CBRE Research. Key fundamentals in Denver, like asking rents, absorption, and invest- ment sales, show solid momentum despite economic headwinds. Notably, the direct vacancy rate in metro Denver sits at 6%, which is down 30 basis points from a year ago. The southwest submarket saw the largest annual drop in vacancy after falling 70 bps to 3%. This indicates demand for retail space remains healthy in metro Denver, especially in suburban submarkets. Nationally, the availability rate hit an 18-year low of 4.8% in the third quarter, show- ing the supply- demand balance is tight across the entire country. Driven by the low vacancy rates, the average retail ask- ing rental rate in metro Denver rose 1.8% quarter over quarter to end at $19.90 per square foot triple net. That outpaces the 0.4% national asking rent growth recorded for the third quarter. With vacancy low, Denver landlords have remained confident, push- ing rents higher as tenant demand persists. Net absorption remained positive in metro Denver, with nearly 25,000 sf absorbed in the third quarter. This brought the year-to-date total absorption to a strong 485,000 sf, which was largely driven by the suburban submarkets. The southeast submarket saw the highest absorption this quarter, fol- lowed by the south submarket. On a national level, there was positive absorption across all retail property types. New construction completions slowed significantly in Denver, with only 74,000 sf delivered in the third quarter. This represents a 68% decrease from last quarter and 64% decrease from a year ago. Notable projects completed this quar- ter were smaller, neighborhood- Please see Lyons, Page 17 Brad Lyons Executive vice president, CBRE National Retail Partners – Mountain Matthew Henrichs Senior vice president, CBRE National Retail Partners – Mountain Selling things people are not buying online but are using every day Strip mall steps up PAGE 13