Colorado-Real-Estate-Journal_421038

Page 30 - September 18-October 1, 2024 www.crej.com Law & Accounting Greenberg Traurig is a service mark and trade name of Greenberg Traurig, LLP and Greenberg Traurig, P.A. ©2024 Greenberg Traurig, LLP. Attorneys at Law. All rights reserved. Attorney Advertising. Contact: Neil Oberfeld in Denverat303.572.6500.°Thesenumbersaresubject tofluctuation. 40305 GREENBERG TRAURIG, LLP | 2750 ATTORNEYS | 47 LOCATIONS WORLDWIDE ° 1144 15th Street | Suite 3300 Denver, CO 80202 | 303.572.6500 GTLAW.COM GT Denver’s Real Estate Team Jessie Lindimore Brady McShane Chloe Mickel Christopher Neumann Katy O’Brien Neil Oberfeld Keith Pockross Carlos Schidlow Paul Seby Christopher Thorne Matthew Tieslau Andrea Austin Mark Baker Alex Cain Stephen Goler Kevin Kelley Our goal is to provide more than just legal services to our clients. We strive to go beyond delivering traditional legal services, acting as a strategic partner to our clients. Our mission is to support their business goals with cutting-edge legal solutions in the real estate industry. WORLDWIDE LOCATIONS United States, Europe and the Middle East, Asia, Latin America I n the ever-evolving land- scape of commercial real estate, neighborhood retail leas- ing stands out as a stalwart per- former. Despite challenges faced by other asset classes, neighbor- hood retail continues to exhibit strength and stability. Let us delve into the key factors driving its success. In the first half of 2024, the national retail vacancy rate remained at an impressive 4.1%. This resilience is attributed to increased demand and fewer tenant bankruptcies. Retail space saw a surge in demand, with 54 million square feet (about twice the area of Central Park in New York City) leased, particularly in food and beverage, discount, off-price, and experiential sectors. The sustained demand has kept vacancy rates low, making retail an attractive investment. Robust consumer spending has been a driving force behind neighborhood retail's success. As cities continue to evolve, urban retail experiences a resurgence. Record-low total retail vacancy rates have contributed to a com- bined 3.3%growth in asking rents inprime retail corridors from2022 to 2023. Consumers’ preferences for local shopping centers and community- oriented expe- riences have b o l s t e r e d neighborhood retail. D e s p i t e higher con- s t r u c t i o n costs, devel- opers have continued to invest in retail spaces. Construc- tion totaled 50.4 million sf, with 6.5 sf million, delivered in the sec- ond quarter, focusing on build- to-suits and grocery-anchored centers. Leasing rates remain above average, and net absorp- tion reached 7.2 million sf (about twice the area of a large shopping mall) in the second quarter. Aver- age retail rents rose to $34.12 per sf, indicating sustained growth. Economic uncertainties and interest rate fluctuations impact various asset classes, but neigh- borhood retail remains resilient. Analysts predict unchanging vacancy rates and moderately positive rent growth for neigh- borhood and community shop- ping centers throughout 2024. As consumers seek convenience and local experiences, neighborhood retail leasing is poised to thrive. Some examples of success- ful neighborhood retail spaces include: 1. Williamsburg, Brooklyn, New York: Once a primarily resi- dential neighborhood, Williams- burg has transformed into a thriv- ing retail hub. Its mix of local boutiques, specialty stores, and artisanal eateries draws both resi- dents and visitors. 2. The Ferry Building, San Francisco: This iconic space com- bines indoor and outdoor ele- ments, creating a vibrant mar- ketplace. It features local food vendors, specialty shops and a bustling farmer’s market, making it a beloved neighborhood gath- ering spot. 3. Pike Place Market, Seattle: Pike Place Market is a historic landmark known for its lively atmosphere. It houses a variety of businesses, from fishmongers to craft stalls, creating a unique and authentic retail experience. 4. Lincoln Park, Chicago: Lin- coln Avenue in Lincoln Park is a great street to explore. It’s home to a variety of shops, boutiques and local businesses. And some successful neigh- borhood retail areas in Denver include: 1. The Source: The food hall that started the trend in 2013 fea- tures local restaurants and food trucks. It benefits both local busi- nesses and consumers. 2. Avanti: Another popular food hall in Denver, Avanti offers a variety of culinary options and supporting local vendors. 3. LoDo District Inc.: Repre- senting the Lower Downtown Historic District, this organization fosters community engagement and supports local businesses. The success of neighborhood retail spaces can be attributed to several key factors: n C ommu n i t y - c e n t r i c approach: Successful neighbor- hood retail spaces prioritize com- munity engagement. They foster a sense of belonging by hosting events, supporting local causes and collaborating with nearby residents. n Curated tenant mix. Awell- thought-out mix of tenants is cru- cial. Combining anchor stores, specialty boutiques and food vendors creates a diverse and appealing environment. Variety attracts different demographics and keeps foot traffic steady. n Location and accessibility. Proximity to residential areas, public transportation and pedes- trian-friendly streets enhances accessibility. Easy access encour- ages repeat visits and word-of- mouth recommendations. n Unique experiences. Retail spaces that offer unique experi- ences stand out.Whether through art installations, live music or interactive displays, these spaces create memorable moments for visitors. n Adaptability. Successful retail spaces evolve with chang- ing trends. They stay attuned to consumer preferences, adjust- ing their offerings and services accordingly. When it comes to neighbor- hood retail leasing, there are sev- eral legal challenges that both landlords and tenants should be aware of: n Exclusive uses. Exclusive use rights are highly negotiated. Tenants want to protect their specific business niche by pre- venting landlords from leasing to similar tenants, while landlords aim to maintain leasing flexibil- ity. Ensuring proper enforcement and remedies for exclusivity vio- lations is crucial. n Co-tenancy. Tenants often choose locations based on neigh- boring businesses. To protect against high-profile tenant clo- sures, some tenants seek co-ten- ancy provisions, so that they can Robust spending drives resilience of neighborhood retail Jeff Friedman Attorney, Hall Estill Please see Friedman, Page 47