Retail Leasing Market Remains on a Roll
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Leasing activity is being driven by strong demand for smaller spaces with the average space leased around 3,000 square feet, a new all-time historical low. The increase in activity for smaller footprints is being overwhelming driven by the growth in the store counts for cellular retailers and quick service restaurants brands such as Starbucks, Yum Brands, and Restaurant Brands International. The demand is also there for medium to larger retail users, such as Dollar Tree and Dollar General, as well as by off-price retailers like TJ Maxx and Burlington.
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Fort Collins/Loveland/
Larimer County
The Larimer County sub-market is comprised of 22.4 million square feet of retail space, up 0.2% from Q4 2021. 12 month net absorption is negative 118.5% or negative 44,600 square feet, where the prior period saw positive net absorption of 241,000 square feet signally a significant decline in leasing activity through out 2022. The vacancy rate has increased to 3.8% (845,000 square feet), up from 3.4% in Q4 2021. The availability rate currently sits at 4.6%, up from a record low of 3.7% in Q2 2022. Of the 141 retail leases completed in the last year, only three were over 10,000 square feet. The Picklr, a premier indoor pickle ball club, leased 20,533 square feet at 3137 N. Garfield Avenue in Loveland, in the building previously occupied by Hobby Lobby.
Although leasing activity has slowed, rent growth has increased by 5.3% since Q4 2021, with average market rents at $21.23 per square foot, a new record high for the sub-market. Average market sale price per square foot is also at a record high of $252, up 5.3% from Q4 2021. Market cap rates remain stable at 6.4%.
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Greeley/Weld County
The Greeley/Weld County sub-market is half the size of Larimer County, with 12 million square feet of retail space. There is currently 125,000 square feet under construction, a 172.6% increase from Q4 2021. 12 month net absorption is also on the rise at 167,000 square feet, a 230% increase from the prior period. The vacancy rate has declined 0.7% from 2021 and is sitting at 2.9% or 352,000 square feet. 67 retail leases were signed in the last year, with only two being over 10,000 SF. Habitat for Humanity leased 49,672 square feet at the Greeley Mall and Burlington Coat Factory leased 27,974 square feet at 4735 W. 29th Street, a standalone building among other big box retailers.
Rents are increasing and have grown 4.6% from Q4 2021 with an average market rent of $16.80 per square foot. The average market sale price per foot is $202, a 5.3% increase from the prior period. Average market rents and sale price per square foot are at an all time high, mirroring Larimer County. Market cap rates remain at an all time low of 6.69%.
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Realtec is here to help navigate the changing market
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CoStar Market Reports - Larimer and Weld County
Q4 2022
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(970) 346-9900
1711 61st Street, Ste. 104
Greeley, CO 80634
Lanny Duggar
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(970) 229-9900
712 Whalers Way, Bldg. B, Suite 300
Fort Collins, CO 80525
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(970) 593-9900
200 E. 7th Street, Ste. 418
Loveland, CO 80537
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This quarterly publication is authored by Jamie Globelnik of Realtec Loveland
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