Mar­ket main­tains in­dus­trial strength

Com­mer­cial real es­tate in great de­mand in metro Den­ver

The Denver Post - - BUSINESS - By Aldo Svaldi

Strong job and pop­u­la­tion gains con­tin­ued to sup­port Den­ver’s of­fice and in­dus­trial mar­kets in the sec­ond quar­ter, and even the strug­gling re­tail sec­tor got some re­lief as the num­ber of va­cant big-box stores de­clined.

“New jobs have cre­ated de­mand for new space,” said Matt Vance, an econ­o­mist and di­rec­tor of re­search for CBRE in Colorado, which pro­vided a mar­ket up­date Mon­day.

Of the three ma­jor com­mer­cial real es­tate seg­ments, in­dus­trial re­mains the strong­est in metro Den­ver. Tenants have ab­sorbed more space than they have let go for an un­prece­dented 29th con­sec­u­tive quar­ter, with no signs that is about to end.

“That is the long­est run in my 30-year ca­reer,” said Jim Bolt, ex­ec­u­tive vice pres­i­dent with CBRE In­dus­trial & Lo­gis­tics Ser­vices. “It is hard to get less va­cancy than what we have.”

In­dus­trial lease rates con­tinue to rise, sup­ported by re­straint in new con­struc­tion. About three-quar­ters of what is in the pipe­line will be built around Den­ver In­ter­na­tional Air­port and on the north side of the metro area.

One rea­son in­dus­trial space is in such de­mand is that con­sumers are buy­ing more goods on­line, ne­ces­si­tat­ing more distri­bu­tion cen­ters and ware­houses.

Tra­di­tional re­tail­ers, how­ever, re­main un­der pres­sure. Pay­less ShoeSource, Ra­dioShack, JC Penny, Sears, Kmart, Macy’s, Guess, Aber­crom­bie & Fitch, Amer­i­can Ap­parel, Bebe and Gord­mans are some of the chains that have an­nounced bank­rupt­cies or wide-scale store clo­sures.

But mixed-use re­tail, the smaller stores that fill the ground floor of some new ur­ban apart­ment and of­fice build­ings, as well as space for restau­rants, re­mains in de­mand.

Matthew DeBar­tolomeis, vice pres­i­dent with CBRE Re­tail Ser­vices, said metro Den­ver de­vel­op­ers have nearly 1.2 mil­lion square feet of re­tail space un­der con­struc­tion and de­liv­ered 313,000 square feet of new re­tail space, a 9 per­cent in­crease com­pared with the same pe­riod last year.

Just two projects, the sec­ond phase of the Stan­ley Mar­ket­place and the Alamo Draft­house Cin­ema in the Sloan’s Lake neigh­bor­hood, ac­counted for more than half the new re­tail space added.

On the down­side, the heavy hail storm in May knocked 50-plus stores at Colorado Mills out of com­mis­sion un­til re­pairs are com­pleted.

A year ago this month, En­gle­wood-based Sports Author­ity, once the na­tion’s largest sport­ing goods re­tailer, closed its re­main­ing 460 stores, in­clud­ing 31 in Colorado af­ter fail­ing to find a buyer in bank­ruptcy.

DeBar­tolomeis also noted that even the big-box re­tail spa­ces that dot the metro area are slowly get­ting ab­sorbed.

There were 92 of those a year ago and 76 at the end of the sec­ond quar­ter.

Chris Pheni­cie, se­nior vice pres­i­dent with CBRE Ad­vi­sory & Trans­ac­tion Ser­vices, notes that all the res­i­den­tial devel­op­ment in cen­tral Den­ver is sup­port­ing both re­tail and of­fice devel­op­ment, giv­ing the area a vi­brancy that ap­peals to ed­u­cated mil­len­ni­als and the em­ploy­ers try­ing to lo­cate near them.

Pho­tos by RJ San­gosti, The Den­ver Post

Stan­ley Mar­ket­place of­fers an ur­ban set­ting in north­west Aurora bor­der­ing Sta­ple­ton. The pop­u­lar mar­ket­place fea­tures more than 50 in­de­pen­dently owned busi­nesses un­der one roof.

ADDING: The Alamo Draft­house dou­bled its Colorado op­er­a­tions with a new mul­ti­plex near Sloan’s Lake.

Den­ver Post file

SUB­TRACT­ING: Sports Author­ity closed 31 stores in Colorado when the com­pany shut down in 2016.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.