Denver small office and retail space commercial real estate market

Leasing commercial small office or retail space in the Denver Metro area.

There is a lot of interest right now in the Denver commercial small office and retail space real estate market.  I'm defining small as less than 3,000 square feet.  This seems to be occurring for a few reasons and may be a bright spot of recovery for the economy. 

• Recently laid off workers starting new businesses.
• Successful home based companies leasing commercial space for the first time.
• Companies downsizing to smaller commercial office or retail space.
• Companies downsizing to cheaper commercial office or retail space.

Thankfully we have successfully worked will each type of commercial real estate client in the last month as see some definate trends occuring.  A few skilled consultants, professionals, or trades people are being smart in using a commercial real estate broker to help them seek the best space, negotiate a lease, and advise them about potential problem areas when first starting a new business that requires a professional office or storefront.  These are people right now that are tired of job market uncertainty, have recently been laid off, or are just ready to take that next step for their buiness.  They typically have assets in a 401k or bank account that is financing their endeavor so they don't have to deal with the banks.

A second group seems to be the companies who have leases that are expiring or are just negotiating out of their existing lease.  These companies are seeking smaller and/or less expensive office or retail space.  They accept the state of the economy, the economics or their situation and are acting in a prudent manner.  They seeking the advice of a commercial broker to gauge the market, negotiate the new lease, and fill in any knowledge gaps they may have with respect to commercial property leasing.

Unfortunately in this area and market, there are a large number of new or newer property developments that have lease rates in the mid to high 20's per square foot, plus triple net (NNN) expenses that make the space unaffordable in this current real estate market.  I have read where some national real estate experts predict we are going to have a 30% contraction in the amount of retail space needed by businesses in the next few years.  If the recent spate of big box users (Circuit City, Linens and Things, etc.) going bankrupt and liquidating is any example, then the big, expensive, newer shopping centers and strip malls are in serious trouble.