Strip Mall Vacancies in Denver Metro Area

[Dan Williamson]

Hi Everyone,

The other day I took a long, winding route home from work through a bunch of neighborhoods between downtown Denver and Central Aurora. I noticed that there seem to be a lot more spaces available for lease than usual in strip malls all over. Like a LOT more.

Any ideas about what this means? Does anyone think it's a signal from the market? Or just bad business models that can't keep cash flowing against rising rents?

Thoughts?

[Bill S.]

@Dan Williamson - so bricks and mortar retail is on the ropes. What you have is anecdotal at best. Find a broker's sign in one of the vacant properties and make him give you a market analysis for retail commercial real estate. The report should include vacancy rate, rent rates, absorption rate, square feet under construction, and square feet in planning. I believe that one of the National Firms with a local office (Marcus Millichap comes to mined) does a market overview every year or every quarter. Get you hands on that. It will likely answer your question about the direction of retail.

My guess is that the neighborhoods you are traveling through are older areas where the whole concept of retail has changed from when they were built. The old strip centers are functionally obsolete and struggling to reinvent themselves. Example of this on a larger scale is the South Glenn Mall, Villa Italia, and the Westminster Mall.