(For more retail coverage, click GlobeSt.com/RETAIL.)
DENVER-Population growth in the metro area is expected to continue at a pace slightly higher than that of the national average, with an additional 500,000 people in the region during the next 10 years, Grubb & Ellis notes in its latest retail projection report. The growth, of course, generates additional potential for spending, which hasn't gone unnoticed by tenants new to the market, as well as developers, building new open-air malls and neighborhood centers.
"Vacancy rates will be the highest in the Northeast and West submarkets where much of the new construction is occurring," Grubb & Ellis notes. "It is projected that the amount of new retail construction in the pipeline will outpace absorption year over year through at least 2008. At this point, jobs and immigration are anticipated to surge again."
The report, however, notes that shopping remains a favorite pastime for visitors. Shopping malls or urban destination retail districts represent more than half the top tourist destinations for visitors, Grubb points out.
The report notes that a number of large tenants are opening or expanding here. It notes that Bass Pro Shops recently opened its first store, a 186,000-sf store in Stapleton. In addition, Cabela's plans to open its first store in Wheat Ridge, along Interstate 70. And Nordstrom, at long last, plans to open a store in the Taubman-owned Cherry Creek shopping center, while many expect Ikea to announce a store in the metro area.
"This increasing tenant activity will continue to promote a relatively stable vacancy rate despite large volumes of continued new construction," the report notes. "Vacancy rates will remain lowest in submarkets with high barriers to entry, such as Downtown and Cherry Creek."
Other trends are the creation of new town center within older cities, and transit-oriented developments around new light-rail station. These TODs, to be built around FasTracks funded stations, should spur developments for the next decade, the report notes.
"Additionally, many aging enclosed regional malls are undergoing rebirth as mixed-use center, including the Belmar project in Lakewood," the report states. "There are a handful of other aging malls throughout the metro region that could profit from this trend, creating opportunities for additional new retailers and quasi-retail tenants in older-ring suburbs where infill sites are less plentiful."
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