Market Update – Q3 2022 – Denver Retail
A boom in consumer spending has been a key driver for the recovering retail sector in the last year. Personal savings added up during the pandemic as people stayed home, and those savings translated into a substaintial uptick in spending. Additionally, the fiscal support provided by the United States government throughout the pandemic provided consumers with additional funds at their disposal.
The pandemic accelerated the rise of e-commerce, which has cut into traditional retail market share. But sales at brick-and-morter locations also rose in the last year, prompting tenants to expand their footprints. Trailing 12-month absorption totals 930,000 square feet, a sharp rebound after 850,000 square feet was vacated in 2020. Asking rents are on the rise, increasing by 3.4% year-over-year. Investors have returned to the market; sales volume in 2021 was the best year on records.
While fundamentals have improved, the sector still faces headwinds in 2022. Foot traffic returned to Denver’s urban areas, including Downtown and Cherry Creek, with the successful roll out of the vaccine. But retailers continue to struggle with supply and labor shortages, and rising inflation is eroding consumer buying power. The issue is felt across all economic sectors and will take time to resolve.
Download the Market Report to see an in-depth look at the Denver retail market for Quarter 3 of 2022.