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Market Report

Denver Retail Market Report

2023 Investment Forecast

Retailers Look to Downtown’s Surrounding Suburbs;
Decreased Investor Competition Offers Opportunity

CBD-adjacent locales backstop fundamentals amid easing retail recovery. Strong leasing activity continued last year, helping push vacancy to its lowest point since the onset of the pandemic. This metrowide rebound was most prevalent in the Aurora, Northwest and Southeast submarkets, where vacancy compressed by at least 100 basis points in 2022. Growing residential neighborhoods here should continue to attract retailers, partially offsetting the impact of metrowide headwinds. A contracting labor market amid elevated inflation will weigh on households’ incomes and discretionary spending this year, leading to a short-term delay in Denver’s retail sector recovery. Fortunately, new supply will be minimal in 2023. Looking further down the line, however, several sizable developments are in the proposed pipeline, including the $1 billion Cherry Creek West project. Here, recently notable rent gains, a lack of construction and relatively stable vacancy indicate this new space should be well received in the submarket moving forward.
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