Denver's retail market has staged a quiet, yet strong comeback, giving the sector runway to withstand a potential slowdown in the year ahead. Contributing to this comeback was the significant lift in consumer spending coming out of the pandemic. Denver's retailers now have a fresh set of headwinds to contend with in 2023. High inflation, rising consumer debt, and a high interest rate environment are weighing on purchasing power, creating challenges for local retailers. But today's retail market is entering into this uncertain season from a position of strength.
New leasing activity has remained in line with the longterm average for the past seven quarters. While a handful of retailers in Denver have announced store closures, move-ins are significantly outpacing moveouts, and net absorption has remained in positive territory since mid-2021. That has resulted in a yearover- year vacancy change of -0.4% to 4.1%, nearing record lows.