Denver retail market saw highest space under construction in Q4 2017 since Q2 2009
The Denver retail market had more than 1.6 million square feet of retail space under construction in fourth quarter 2017, the highest amount since second quarter 2009, according to CBRE.
Positive net absorption of 375,509 square feet was recorded in fourth quarter 2017, bringing the year-to-date absorption to 339,012 square feet.
Year-over-year, the average direct asking lease rate increased 4.4 percent to $18.55 per square foot NNN. Although direct vacancy decreased by 33 basis points quarter-over-quarter to 6.4 percent, the rate is 124 basis points higher than fourth quarter 2016, according to CBRE.
Denver’s industrial market saw nearly 500,000 square feet of positive net absorption in fourth quarter 2017 as well, driven largely by new deliveries, bringing year-to-date net absorption to 3.6 million square feet and the direct vacancy rate increased 34 basis points to 5.8 percent.
A total of nine projects delivered, totaling almost 1.4 million square feet, and the overall average asking lease rate rose $0.06 to $7.67 per square foot NNN.
In the Airport submarket, average asking rates increased by $0.28, or 5.1 percent, reaching $5.75 per square foot NNN.
Denver’s office market recorded positive net absorption in fourth quarter 2017 as well. Positive net absorption of 254,358 square feet was recorded, bringing year-end 2017 net absorption to 1.4 million square feet, up 4.7 percent from year-end 2016.
The average direct asking lease rate in Denver’s office market increased to a record high of $26.54 per square foot FSG, a 3.2 percent increase year-over-year. Direct vacancy increased slightly as well from the previous quarter to 12.8 percent, up 66 basis points year-over-year, according to CBRE.
The largest transaction of the quarter was the landmark sale of 1401 Lawrence in downtown Denver. The newly constructed 22-story office tower was acquired by an affiliate of Heitman.