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DENVER-The growth trend in the metro area's retail market, as expected, slowed slightly in the fourth quarter 2004, according to the latest MarketView Denver Retail report by CB Richard Ellis. The report identifies high-energy prices, rising interest rates and the softening single-family market as the leading culprits.
"Absorption turned slightly negative in the fourth quarter of 2004 for the first time in two years, losing 133,523 sf of occupied space," the report notes. "This negative absorption pushed the direct vacancy rate up slightly to 6.4%"
The good news is that the year still ended with absorption of almost 900,000 sf, thanks to strength in the first three quarters. Construction activity increased by more than one million sf in the fourth quarter, pushing the under-construction total to an all-time high of six million sf.
"In addition, there still remains over four million sf of retail space in the planning stages," the report notes. "Proposed lifestyle centers, mixed-use projects and transit-oriented developments continue to be announced throughout the metro area. Although the large amount of developer activity leaves some analysts concerned, steady job growth--a gain of 16,800 jobs as of November--and projected population growth lend optimism for strength through 2006."
The report notes that the Colorado Boulevard/Cherry Creek submarket boasts the lowest vacancy rate at 2.1%. That market has only 2.4 million sf of total space. The southeast submarket, with 6.18 million sf, is not far behind with a vacancy rate of 2.3%. The Boulder market, with 6.2 million sf has a vacancy rate of 3.8%; and the southwest, with 6.4 million sf, has a vacancy rate of 4.3%. The southern market, with 9.6 million sf, has a vacancy rate of 5.6%; the northeast, with 5.07 milling sf, has a 7.2% vacancy rate; the central market, made up of 7.9 million sf has a 7.6% vacancy rate; the northwest, with 11.2 million sf has a 7.9% vacancy rate; Aurora, with 7.07 million sf, has an 8.7% vacancy rate, and finally, the west submarket, with 7.8 million sf of total space, has the highest vacancy rate in the metro area at 9.6%.
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