A comprehensive analysis of Denver’s retail market fundamentals, vacancy trends, and investment outlook for 2026.
Executive Summary
Denver’s retail real estate market enters 2026 as one of the strongest performing commercial property sectors. With vacancy rates near record lows, minimal new construction, and steady consumer demand, retail offers a compelling alternative to challenged office and transitioning multifamily markets. For investors seeking stability and income, Denver retail presents attractive opportunities across multiple formats.
Current Market Conditions
| Metric | Denver Retail |
| Availability Rate | 4.7-4.8% |
| Historical Context | Record/Near-Record Low |
| Rent Growth (YoY) | +2.7% to +3.6% |
| Construction (% of Inventory) | 0.3% |
| Market Outlook | Strong/Positive |
Source: CoStar, SVN Denver Commercial, CBRE, Cushman & Wakefield Denver Retail Reports 2025
Why Retail is Outperforming
Minimal New Construction
Retail construction has been extremely limited, with new development representing just 0.3% of existing inventory. Unlike the industrial sector, which saw significant speculative development, retail developers have remained disciplined. High construction costs, challenging financing, and cautious tenant expansion have kept new supply in check, supporting occupancy and rent growth for existing properties.
Resilient Consumer Spending
Despite inflation concerns and economic uncertainty, consumer spending has remained resilient in the Denver market. The region’s strong employment base, educated workforce, and above-average household incomes support retail demand. Denver’s population growth continues to add consumers, expanding the customer base for retailers.
E-Commerce Adaptation
Rather than destroying brick-and-mortar retail, e-commerce has driven adaptation. Successful retailers have integrated online and physical channels, using stores for fulfillment, returns, and customer experience. The retailers surviving and expanding today have proven business models that complement rather than compete with online shopping.
Flight to Quality Locations
Similar to office, retail has experienced flight to quality. Well-located centers with strong anchors, good visibility, and affluent trade areas have thrived. Marginal locations and dated centers face challenges, but quality retail real estate is in high demand from both tenants and investors.
Retail Formats Performing Well
Grocery-anchored centers: Centers anchored by strong grocery operators like King Soopers, Whole Foods, Sprouts, and Trader Joe’s continue to perform exceptionally well. Grocery provides essential, recession-resistant traffic that benefits co-tenants.
Neighborhood retail: Small strip centers serving daily needs in residential areas maintain strong occupancy. Service tenants, quick-service restaurants, and convenience retail thrive in these locations.
Experiential retail: Restaurants, fitness centers, entertainment venues, and service businesses that cannot be replicated online continue expanding. These uses drive traffic and create destinations.
Mixed-use ground floor: Retail space in mixed-use developments, particularly in urban and walkable locations, commands premium rents and strong tenant interest.
Challenged Retail Segments
16th Street Mall: Downtown Denver’s primary retail corridor has faced significant challenges, with vacancy reaching approximately 25%. The recent completion of mall renovations in October 2025 has shown early positive results, with a 35% revenue increase in finished sections and 57 new businesses opening downtown in 2025.
Big-box retail: Large format retail boxes remain challenging to fill when anchor tenants depart. Redevelopment or subdivision is often required.
Dated strip centers: Older centers in secondary locations without strong anchors struggle to compete for tenants and may require significant repositioning.
Investment Outlook
Denver retail offers attractive risk-adjusted returns for investors in 2026:
Cap rates: Quality grocery-anchored and neighborhood retail trades at 6.0-7.5% cap rates. Single-tenant NNN retail with credit tenants trades at 5.5-7.0% depending on lease term and tenant credit.
Rent growth: With vacancy at record lows and limited new supply, landlords have pricing power. Rent growth of 2.7-3.6% annually should continue.
Stability: Retail offers more predictable cash flows than office in the current environment. Essential retail tenants provide recession resistance.
2026 Forecast
Denver retail fundamentals should remain strong through 2026. Limited new construction will continue to support low vacancy and rent growth. Consumer spending, while potentially moderating, should remain sufficient to support tenant demand. The sector offers a compelling combination of stability, income, and modest growth potential.
Key risks to watch include potential economic slowdown affecting consumer spending, continued evolution of retail formats, and interest rate impacts on investment pricing. Overall, retail remains one of the most attractive commercial real estate sectors in Denver.
Bottom Line
Denver’s retail market stands out as a bright spot in commercial real estate for 2026. Record-low vacancy, minimal new supply, and resilient consumer demand create favorable conditions for both landlords and investors. While not immune to economic cycles, quality retail real estate offers stability and income that is increasingly valued in uncertain times.
About SVN Denver Commercial
SVN Denver Commercial provides retail investment sales, tenant representation, and landlord leasing services throughout the Denver metro area. Contact us to discuss retail opportunities.