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Market Report

Denver Retail Market Report

2019 Outlook

Softened Construction Keeps Vacancy on Downward Trajectory; Buyers Keep Options Open

Tight conditions persist in urban core.
For the 10th consecutive year, the average market vacancy will contract, retreating below 5 percent for the first time in more than a decade. The urban core and adjacent neighborhoods carry the lowest rates in the metro around 3 percent. Areas farther from the core are witnessing vacancy measures above the market rate as supply growth in these areas is more substantial. However, on a metro level, development will decrease in 2019, dropping roughly 40 percent in relation to last year. Shopping centers make up a sizable portion of this year’s construction volume, headlined by Vista Highlands in Broomfield. The metro’s largest completion will be Phase II of the 9th and Colorado mixed-use project, which adds roughly 185,000 square feet of retail space. This development is projected to create more demand for neighboring retail locations as vendors seek the proximity to a prominent social hub, building on the area’s already-strong rent growth. Parts of Aurora may also log significant rent advances as household formation strengthens, especially in the suburb’s most easterly sections.

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