Denver’s retail market remained resilient in Q3 2025, supported by strong tenant demand and minimal new supply. Average asking rents reached a record $27.00 per square foot, rising 3.1% year-over-year, with neighborhood and strip centers posting the strongest gains. Leasing conditions were tight, with availability near 4.8%, well below the long-term average. Demand was led by quick-service restaurants, fitness users, and experiential retailers, particularly in commuter corridors and mixed-use developments. However, larger power centers and downtown spaces continued to face leasing challenges. Despite modest rent growth relative to historically low vacancy, Denver’s retail sector remains stable, driven by healthy consumer spending, an evolving tenant base, and limited new construction that continues to balance market fundamentals.

 

Key Findings

• Retail investment volume reached $1.3 billion over the past year, with a 6.6% average cap rate, as private buyers dominated single-tenant transactions under $5 million.
• Retail fundamentals remain solid, with vacancy at 4.4% and steady rent growth supported by healthy consumer demand and active leasing from national and experiential tenants.
• Roughly 600,000 square feet of new projects are underway, primarily single-tenant and mixed-use sites, signaling selective expansion aligned with evolving retailer strategies.

 

Denver Retail Supply & Demand Dynamics

Source: CoStar Group, Inc.

 

Denver Demographics

Source: CoStar Group, Inc.

• Unemployment Rate: 4.8%
• Current Population: 3.07M
• Households: 1,286,632
• Median Household Income: $107,804

 

Denver, Colorado’s largest metro with 3.07 million residents, remains a key economic hub supported by its central location and Denver International Airport, which drives over $47 billion annually. While its diverse economy and highly educated workforce underpin long-term strength, growth has slowed due to high costs and weaker migration. Population gains have eased to 0.8% annually, and office demand remains soft amid slow return-to-office trends. Multifamily leads development, while industrial expansion continues near the airport. Despite near-term challenges, Denver’s talent base and diversified industries position it for steady long-term stability.

 

Population, Labor, & Income Growth

Source: CoStar Group, Inc.

 

Denver Retail Construction

About 600,000 square feet of retail space is under construction in Denver, accounting for just 0.4% of total inventory. Developers have shifted away from large retail projects toward smaller build-to-suits and mixed-use ground-floor spaces, with national tenants like Raising Cane’s and Dutch Bros Coffee leading expansion. Over the past decade, retail inventory grew 4.6% while industrial surged 22%, reflecting e-commerce’s influence. Meanwhile, over 2.2 million square feet of retail has been demolished, offsetting new supply. Population growth and strong retail sales highlight a market focused on efficiency and redevelopment, with projects increasingly incorporating multifamily elements to adapt to evolving consumer and urban trends.

 

SF Construction Starts

Source: CoStar Group, Inc.

 

SF Under Construction

Source: CoStar Group, Inc.

 

Denver Retail Sales

Retail investment in Denver totaled $1.3 billion over the past year, slightly below the 10-year average, as activity stabilized following sharp declines in 2022. In today’s high interest rate environment, smaller private investors dominate, targeting single-tenant, net-leased assets under $5 million, often using all-cash or 1031 exchanges. Roughly 65% of deals involved private buyers, with cap rates averaging in the mid-5% range but varying by tenant credit and lease term. Larger transactions were limited, focused on value-add opportunities like the $20.4 million sale of Summer Valley Shopping Center. Looking ahead, pricing gaps and elevated borrowing costs are expected to temper deal flow and valuations.

 

Denver Retail Sales Volume

Source: CoStar Group, Inc.

 

By the Numbers

Source: CoStar Group, Inc.

• Sales Volume: $1.3B
• Price Per SF: $275
• Cap Rate: 6.6%
• Vacancy Rate: 4.4%
• Rent Growth: 3.5%
• Asking Rent Per SF: $27.14
• Under Construction: 611K SF
• Delivered: 137K SF
• Absorbed: 85.7K SF