Denver Retail Demand Plummets as Rents Remain at Five-Year High
Denver's retail segment isn't in the best position from a demand perspective, with other key fundamentals struggling as well.
Net absorption in the third quarter turned to negative territory at -310,000 square feet compared with a positive 255,000 square feet recorded in the previous three months, according to a market report from CBRE. By property type, neighborhood, community and strip centers performed the worst, with the categories combined leaving -285,000 square feet of absorption. All property types were in negative territory, except for lifestyle and malls, which brought +70,000 square feet to the market.
Overall retail availability in Denver increased by 20 basis points to five percent.
Also, investment sales trended downward, going from $216.5 million in the second quarter to $157.8 million. Realty Income Corp. made the largest third-quarter buy with its $34 million purchase in Westminster. Rio Capital Investments and Huimin Zhan were the next closest, with $13.85 million and $13.25 million purchases, respectively.
Meanwhile, it was a mixed quarter for rents, which averaged $20.48 per square foot. That number was up 55 cents per square foot year-over-year but down 83 cents from the previous three months.
"The last two quarters marked the highest average asking rent in the past five years, with this quarter being more consistent with the trend seen at the end of 2024," CBRE said.
Completions were 60,000 square feet to bring the 12-month total to 174,000 square feet.
Source: GlobeSt/ALM