Denver Business Journal I Colorado’s retail real estate picks up; office and industrial steady

image_galleryRetail space in metro Denver lagged behind its office and industrial counterparts in terms of growth in the last parts of 2014, but the first quarter of 2015 brought a drop in vacancy rate and a corresponding increase in lease rates.

On average in metro Denver, retail vacancy rates dropped to 6.2 percent in the quarter, the lowest recorded figure since 2006, and the lease rate increased to $16.73 per square foot, triple-net, the highest rate recorded rate since 2009, according to the latest data from CBRE Group Inc.

Triple-net leases require the tenant to pay all operating costs such as taxes and utilities, as opposed to full-service leases, which require the building’s owner to pay these costs.

Improvements were led by Class A shopping centers, grocery stores and restaurants, said Jon Weisiger, senior vice president at CBRE. Continued demand in the housing market, particularly in the suburbs, also pushed the growth of retail in the first quarter, he said.

Market-wide, metro Denver’s retail segment experienced 234,355 square feet of positive absorption in the first quarter, a substantial improvement from 720 square feet of positive absorption in the fourth quarter of 2014.
Absorption rate refers to the amount of space purchased or leased in a given segment of the market.

Only two submarkets experienced negative absorption, with Aurora and west Denver giving back 39,127 square feet and 7,906 square feet, respectively.

The negative absorption in west Denver is fairly nominal, Weisiger said, and Aurora is heavy in Class C retail space and has recovered from the recession more slowly than some other parts of the metro area.

The remainder of 2015 should see continued increases in lease rates and decreasing vacancy, though the merger between Office Max and Office Depot could result in some big-box space being vacated, but it’s unclear how much space that might be.

Retail construction stayed strong in the first quarter, with 378,000 square feet of space developed, up from 75,000 square feet in the first quarter of 2014.

Investors also displayed more confidence in Denver retail, spending a total of $158.4 million on retail properties in the quarter, an increase of 54 percent from the same quarter last year.

Denver’s industrial market was also attractive for investors during the quarter, with 2.4 million square feet of industrial space trading hands, twice the 1.2 million square feet that sold in the first quarter of 2014. The 2015 number was given a substantial boost by Denver-based real estate investment trust DCT Industrial’s purchase of the Airport Distribution Center in Aurora, a 689,557-square-foot buy.

Purchasing activity was spurred in the quarter by record-low capitalization rates driven by continued low interest rates, said Todd Witty, first vice president at CBRE. High lease rates on industrial properties also helped drive purchaser demand.

The industrial market maintained the low vacancy rates that characterized the sector during 2014, with average vacancy in the metro area reaching 4.8 percent on the quarter. Lease rates on average reached $6.89 per square foot, triple-net, representing prices seen at historical market peaks, said Doug Viseur, first vice president at CBRE.

Tenants who last signed leases in 2010 when lease rates were depressed are now experiencing some sticker shock as they consider re-signing leases in 2015, he said, and often these companies had not budgeted for the rent increases, but they are well-capitalized enough to withstand the jump in rental rate, Witty said.

Rents are expected to continue on their upward trajectory, with potential double-digit increases across all types of industrial properties for the remainder of the year, in spite of the 2.7 million square feet of industrial space currently under construction in metro Denver. These elevated lease rates are expected to entice more developers to the industrial pipeline, according to CBRE’s report.

Lease rates hit a record high in the office market in the first quarter at $23.69 per square foot, for a full-service lease, an increase of 5.9 percent over the previous year. The vacancy rate metro-wide was 12.9 percent.

Concerns about the drops in oil prices and layoffs at oil and gas companies continue to plague conversations about the downtown Denver office market, which took a large hit in the oil bust of the 1980s. But the impact is not expected to be so great this time, said Tim Swan, executive vice president and managing director at CBRE.

Denver’s job market is much more diversified now, he said, and those companies that have vacated space are smaller, or were holding onto space they were expecting to grow into and have now changed those plans. About 200,000 square feet of sublease space came onto the market in the Central Business District in the first quarter, a “blip” in a market with a total of 26 million square feet, Swan said.

Swan points to recent announcements by companies like financial services provider Transamerica and international cable provider Liberty Global that they would move their offices downtown as a sign of the diversity of downtown Denver’s office market.

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Crosbie Real Estate Group I Recent Deals


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Commercial Real Estate Recap I February 2015 Retail Highlights

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9News I Denver’s population boom changing neighborhoods

OLYMPUS DIGITAL CAMERATravel a couple of blocks from your home and you’ll see it. Construction projects are popping up everywhere in our city and in the suburbs. Whether we like it not, Denver is becoming a popular place to live.
Long-time residents remember a city without the Stapleton and Lowry neighborhoods. Many of those folks also remember a time when the Highlands neighborhood was a quiet area of mostly older homes.
Gail Wheeler remembers when her neighborhood was quiet too. We met her in July when her neighborhood in Jefferson Park was just beginning to change.
“They start early. They work late, and most of my neighbors say this is only the tip of iceberg, wait until the power tools start up,” Wheeler said, describing the sound of non-stop construction.
Wheeler lives near West 21st Avenue and Decatur Street in northwest Denver. She is living at the crossroads of modern and tradition. Modern is the word used to describe the 27 new townhomes going in on either side of Wheeler’s home. Her home would fall under the traditional category.

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USA TODAY I The 10 richest cities in America

Downtown Denver

Downtown Denver

When you think of a rich city, do you think of a place with a ton of million dollar homes? Maybe a place with a lot of culture, job opportunities, or beauty? Many of the richest cities are in high-demand for these very reasons.

But, while some cities may be rich –that is, they have a lot of high earners — the cost of living in these places is really high as well. Your geographic location plays a large role in your cost of living — housing costs, utilities, food prices, and even how much you pay the sitter. So, things kind of balance out in a way.

Using information from FindtheBest, we created a list of the 10 richest cities in America. The list includes cities with a population greater than 500,000 that have the highest percentage of households earning at least $150,000 per year.

We’ve also included information on the corresponding salary a person needs to live comfortably in each of these cities. The salary a person needs to be comfortable in each city is based on studies finding the magic salary number — $75,000 — as the salary amount at which comfort is achieved.

We’ve adjusted this $75,000 upwards or downwards based on living costs in each city, using a cost of living calculator and comparing each city to Phoenix, Ariz. — a city with a moderate cost of living and a median income that’s close to the nationwide benchmark.

The richest cities

These are the 10 richest cities, and the salary a person would need to live comfortably in each of them:

1. San Francisco — You’d need $124,561 to live comfortably in SF.
2. San Jose — You’d need around $115,515 here.
3. Washington, D.C. — $108,092 would be a comfortable salary in the nation’s capital.
4. Seattle — $93,634 would be ideal here.
5. San Diego — You could be comfortable with a salary of $101,984.
6. Boston — $106,082 is what you’d need to be financially comfortable in this northern city.
7. New York City — To live comfortably, you’d need $131,365 in Brooklyn, $169,639 in Manhattan, and $116,907 in Queens.
8. Los Angeles — $102,061 would have you sitting pretty in LA.
9. Denver — $82,036 would be an ideal salary here.
10. Austin — Surprisingly, in spite of the high percentage of people earning over $150,000, you’d only need $72,912 to be comfortable in this Texas city.

Read more: USA TODAY – The 10 richest cities in America
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ICSC PRESS RELEASE : CitySet Wins 2014 ICSC U.S. Design & Development Award

Press release below, featuring our listing at CitySet in Glendale, CO!


ICSC Contact

Jesse Tron: (646) 728-3418


Cityset Wins 2014 ICSC U.S. Design & Development Award

NEW YORK, December 5, 2014 – Throughout its history, the International Council of Shopping Centers (ICSC) has recognized and honored the shopping center industry’s most cutting-edge properties, innovative solutions and creative responses to market trends, as well as outstanding examples of design and development throughout the world through its Global Awards programs. As part of the shopping center industry’s premier awards competition, ICSC is pleased to announce that Cityset, Glendale, Colorado has been chosen as a Silver Design and Development Award winner in its annual U.S. Design and Development Awards. ICSC’s U.S. Design and Development Awards are designed to recognize outstanding projects for excellence in the creation of new retail projects, and in the expansion or redevelopment of existing projects, solely within the continental United States. [Editor’s note: For complete details on this awards and a list of all winners, visit ICSC’s global awards web gallery]. 

Cityset is a seven-acre mixed-use development located in the city of Glendale/Cherry Creek, Colorado, an “island” of sorts as it is surrounded by the city and county of Denver. What started as a hotel remodel, this project became a 250,000-square- foot open-air plaza concept to include an experimental blend of high-profile restaurants, hotels and retail establishments.

Professional regonition was given too Sonely Retail, LLC, Sonely Lodging, LLC & Cherry Creek Lodging, LLC , Owner; Stonebridge Companies, Management/Development Company; Stantec ViBE, Design Architects/Lighting Designer; G3 Architecture, Inc. Production Architects; TCI, Wells Fargo, Finance Company; Milender White Construction Co; Martines Palmeiro Construction, LLC; Waner Construction Co, Inc., General Contractor; and Crosbie Real Estate Group LLC, Leasing Company.

ICSC announced the winners of the 2014 U.S. Design and Development Awards during an awards ceremony at ICSC’s annual CenterBuild Conference in Phoenix, Ariz. The competition was open to shopping center owners, developers, management companies, architects, designers, retailers, or other professionals responsible for any retail project or retail store design that demonstrated unusual development or redevelopment characteristics with a high degree of creativity and uniqueness within the continental U.S.   The competition focused on three general categories: Renovation or Expansion of an Existing Project; New Developments; and Retail Store Design.

In addition, all Gold U.S. Design and Development Award winners are automatically eligible to win ICSC’s VIVA Best-of-the-Best Award.  The ICSC VIVA Best-of-the-Best Awards, which recognize the shopping center industry’s most cutting-edge properties, innovative solutions and creative responses to market trends, throughout the world, will be presented during ICSC’s annual convention, RECon, May 17, 2015 in Las Vegas, Nev.

Founded in 1957, ICSC is the premier global trade association of the shopping center industry. Its more than 67,000 members in over 100 countries include shopping center owners, developers, managers, marketing specialists, investors, retailers and brokers, as well as academics and public officials.  For more information, visit

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Supermarket News I Zell confirms bid for Albertsons spinoffs

AlbertsonsNoted private equity investor Sam Zell has confirmed his interest in acquiring stores to be spun off in the Albertsons-Safeway deal.

In a televised interview Sunday, Zell said Albertsons and Safeway’s focus on completing the $9 billion, 2,400-store deal has created an attractive price for 140 stores those companies may be required to divest in order to meet regulatory approval of the merger.

Zell, who leads Chicago-based Equity Group Investments, at one time owned Quality Food Centers, the Seattle supermarket chain now belonging to Kroger Co.

“Obviously, like any deal, it starts with the price,” Zell said in the interview with Fox News. “In this particular case, this is a $9 or $10 billion merger of Safeway and Albertsons and this is 140 stores that they were forced to divest. So their focus is on getting the big deal done, which creates an opportunistic environment on taking care of the remnants.”

Zell is said to be working with Stuart Sloan, a former QFC president, reports said.

“We have a lot of confidence in the supermarket business,” Zell told Fox. “We’ve been in it before, very successfully, and we think this is an interesting opportunity, and a good deployment of capital.”

Oaktree Capital Management and Convest Partners are also said to be bidders for the Albertsons-Safeway divestitures, according to reports. Neither Safeway nor Albertsons have commented on possible divestitures. They expect their merger to completed shortly.

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