A new real estate report shows a robust post-pandemic rebound for retail, resulting in low vacancy rates, while office building vacancies continue to rise in downtown Denver. The low vacancy rates in retail are due in part to lower levels of new construction, with mixed-use development becoming more common. Nationally, quick-serve restaurants and coffee chains are expanding, contributing to a record low availability for single-tenant retail space. However, bankruptcies are rising, with nine major retailers announcing bankruptcy so far this year. The report also highlights a slow return of employees to offices in Denver, raising concerns about the city’s bounce-back and potential foreclosures.
Quoting a recent real estate report, the rebound for retail after the pandemic has been robust, resulting in low vacancy rates. However, the slow return of employees to offices is still affecting Denver’s commercial real estate.
The report shows that there is “very little availability” for retail space in metro Denver, with only about 5-6% of the retail space open. In sought-after trade areas where retailers and restaurants want to be, the availability is even lower, at around 2%. This trend is due, in part, to lower levels of new construction, with more mixed-use development featuring retail on the first floor of office and multifamily buildings.
On the other hand, the vacancy rate for downtown Denver’s office buildings is 28.1%, Quoting JLL, a global real estate company with an office in Denver. This trend is causing concerns about downtown Denver’s bounce-back and the potential for foreclosures.
Despite the challenging environment, Sam Zaitz, an executive vice president at JLL, believes that retail is resilient and that people enjoy the experience of shopping and going out. He has stayed in retail despite the rise of e-commerce and believes that if they could get through those crazy times, they will be just fine.
Nationally, the report found that customers are spending less on discretionary goods in favor of groceries and necessities due to sustained inflation and recent banking troubles. Discount and online retailers are the beneficiaries of this trend. Expansion by “quick-serve” restaurants and coffee chains has also contributed to a record low 2.4% availability for single-tenant retail space.
However, bankruptcies are on the rise, with nine major retailers announcing bankruptcy so far this year, compared to 10 for all of 2022. Bed, Bath & Beyond filed for bankruptcy protection in April, and while not all of their buildings have found new tenants yet, there is a…
In summary, the rebound for retail after the pandemic has been robust, with low vacancy rates in metro Denver. On the other hand, the slow return of employees to offices is still affecting Denver’s commercial real estate, with a high vacancy rate for downtown Denver’s office buildings. Despite the challenges, retail is proving to be resilient, and quick-serve restaurants and coffee chains are expanding, contributing to a record low availability for single-tenant retail space. However, bankruptcies are on the rise, and the potential for foreclosures is causing concerns about downtown Denver’s bounce-back.
