WESTERN SNAPSHOT, JULY 2004

Denver Retail Market

Significant retail developments in Denver have occurred around the major transportation routes. One of the most influential driving forces in the retail market is the new 470 loop around the city. Park Meadows Town Center mall has spurred development at Interstate 25 and C470 South. Denver-based retail developer Jordon Perlmutter & Co. is currently pre-leasing 950,000 square feet at Larkridge regional retail center, located at I-25 and W470 North in Thornton, Colorado, and has plans for a 900,000-square-foot second phase. Despite being a toll highway, E470 has factored into the construction of Southlands, a major mixed-use project developed by Alberta Development Partners in southeast Aurora, Colorado. Northeast of downtown, Denver International Airport has driven new industrial development, but recently new retail growth has begun near I-70 and Pena Boulevard at the airport’s entrance.

Retail development stretches along the I-25 corridor — from the Parker and Castle Rock submarkets to the south to Fort Collins to the north — in order to service the large number of residential developments and affordable housing communities that are growing in those areas. “Keep an eye on the I-25 corridor north, from Thornton to Fort Collins,” say Dunton Commercial vice president James Craddock and broker associates Jason Kaplan and Jeremy Coward. “The expanding population and bedroom community developments make it an ideal place for retail developers as they follow the rooftops. The rush hour traffic from Fort Collins to Denver looks like a parking lot at times.” The Dunton Commercial team adds that Belmar, Continuum Partners’ massive mixed-use redevelopment west of Denver, and the Stapleton infill development also offer major lease opportunities.

King Soopers’ hold on Denver’s grocery market has been challenged by the expansion efforts of Wal-Mart and Super Target. Cub Foods has left the market entirely while Albertsons has curtailed, if not halted, its Denver development.

Denver’s retail sector has a vacancy rate of approximately 7 percent. Major leases that have closed recently include Galyan’s Trading Company for 84,000 square feet at Belmar, Lowe’s Home Improvement Warehouse in Parker, Super Target at I-70 and Kipling and I-36 and Church Ranch, and Wal-Mart at Gateway in northeast Denver and 72nd & Sheridan. Bass Pro Shop, Harkins Theaters and Sunflower Market are retailers that have recently entered the market. Retail developers active in Denver include Developers Diversified Realty, Miller Weingarten Realty, Regency Centers and Forest City Enterprises.

“Lifestyle centers and New Urbanism [projects] are en vogue and retail developers have started crawling over each other for small sites to develop unanchored retail centers,” say Craddock, Kaplan and Coward.

The new downtown convention center and construction of an expansive light-rail system are sure to make Denver even more attractive for retail development. “The city is taking the right steps to become one of the most attractive cities for locating and relocating businesses,” says Craddock, Kaplan and Coward. “The weather is outstanding and when people show up here they tend to stay because of the quality of life. The Denver population is expanding, which will help support retail in the future.”

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