Denver Retail Market Report
Continued Below-Average Completions Anticipated;
Residential Areas Build on Strong Performance
Post-pandemic supply downshift benefits fundamentals. Over the 10-year period ending in 2019, Denver averaged nearly 900,000 square feet of new retail space per annum. During this decade-long span, the mean annual net absorption total was 1.3 million square feet. Since then, the typical supply influx has fallen to roughly half that pre-pandemic norm, a pace that continues in 2023. Absorption figures over the past two years have remained on par with the strong growth cycle, bringing 2023’s first quarter vacancy to a rate almost 200 basis points below its historic average. A moderate economic outlook and eased retail sales growth this year, however, translate to a slight increase in vacancy. Despite a pullback in the rate of consumer spending growth, a jump in Denver’s net in-migration this year should support long-term demand trends. Denver suburbs stand out amid notable in-migration. After a net outflow in 2021 and a relatively small gain in 2022, Denver welcomes its largest in-migration figure since 2016 this year. This notable influx of residents is a boon for retail spending and subsequent leasing activity, particularly in popular residential areas. Northwest Denver — spanning Arvada, Westminster and Broomfield — as well as the Southeast submarket, embodying the tech center and Parker, headline strong fundamentals. These locations each entered the second quarter with vacancy rates under the market average and 150 basis points below their pre-pandemic figures.