The Rise of Neighborhood Retail

April Broker Insight Cover - Brent Ham

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In the picturesque landscapes of Colorado, a quiet revolution is underway in the realm of retail: neighborhood shopping centers are emerging as thriving hubs of commerce and community. As the first quarter of 2024 comes to an end, we continue to see an increase in market rents and decrease of vacancy rates in Denver’s surrounding suburban submarkets. According to Costar’s 2024 Q1 data, the Aurora market is currently touting a vacancy rate of 2.6% along with the Parker/Castle Rock market falling to 3.2% respectively. This compared to the central Denver market with vacancy rates climbing to 8% and market rent remaining stagnant. While many parts of the state grapple with the challenges posed by shifting consumer preferences, Colorado’s neighborhood retail scene is experiencing a renaissance. To help our clients achieve long-term success in a competitive retail leasing market, here at NavPoint we don’t simply focus on filling space. We embrace a multifaceted approach that prioritizes experience-driven businesses, attracts quality tenants set up for success, and upholds a community vision.

Experience-Driven Business Selection

In todays retail landscape, consumers crave more than just products; they seek memorable experiences. As such, landlords should prioritize attracting businesses that offer unique and engaging experiences to attract foot traffic and keep customers coming back. While power centers and grocery anchored shopping centers naturally have a leg up in generating foot traffic due to national brands, one of the key drivers behind the success of neighborhood retail centers is their strong emphasis on localism and community engagement. From locally owned boutiques, dog friendly breweries, to family-run restaurants and cafes, these centers must prioritize authenticity and a sense of place. They serve as gathering spots where residents can not only shop but also connect with neighbors and support small businesses, fostering a sense of belonging and camaraderie.

Strategic Investment to Attract Quality and Successful Tenants

As vacancy rates continue to compress, it can be easy to fall into the mindset to coast on increased demand. By providing financial incentives and demonstrating a commitment to supporting tenants’ success, landlords can attract strong tenants and maximize the value of their retail properties. Supporting tenants in creating a long-term space where they can thrive is essential for reducing tenant turnover and maintaining a stable occupancy rate. While remaining stagnant for the past couple years, new construction projects are expected to steadily increase in the near future. It then will be crucial for landlords to uphold a professional and safe environment to retain key tenants and prevent them from being lured away by shiny new developments. By assisting tenants with their construction needs and facilitating improvements to their spaces, landlords can not only foster tenant satisfaction but also organically increase rents within the center. This proactive approach not only benefits tenants but also contributes to the overall success and sustainability of a neighborhood center.

Upholding a Safe Community Vision

A successful retail center is more than just a collection of stores; it’s a vibrant community hub that fosters connections and cultivates a sense of belonging. To achieve this, landlords should uphold a clear community vision and curate a diverse mix of tenants that complement one another. Whether it’s supporting local businesses, hosting community events, or providing common gathering spaces, fostering a sense of community enhances tenant synergy and creates a destination where people feel safe to shop, dine, and socialize. Neighborhood shopping centers in Colorado have a unique opportunity to capitalize on the safety and security issues surrounding the migrant and homeless crisis in the city of Denver. By creating a safe communal space, neighborhood shopping centers can position themselves as attractive alternatives for businesses that traditionally thrived on the high population density of urban markets. By fostering a safe and welcoming environment, suburban centers can not only attract businesses seeking refuge from urban safety issues but also cultivate a sense of community that resonates with residents and visitors alike. This strategic approach enables suburban centers to emerge as viable destinations for businesses looking to thrive in a supportive and secure setting.

By embracing these strategies, we at NavPoint believe we can elevate the leasing process and create retail environments that not only attract customers and tenants but also contribute to the overall vitality and success of the community. In an ever-evolving retail landscape, a holistic approach that prioritizes experience, incentives, safety, and community is the key to long-term prosperity in a competitive retail leasing market.

Two great examples of 100% leased neighborhood shopping centers leased by NavPoint that exemplify these standards, is the Lincoln Center in Colorado Springs and The Meadows shopping center in Littleton. Both these centers are anchored by local breweries and include a robust tenant list of local businesses that provide vital services and entertainment to the local community.

Written by Brent Ham

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Navpoint Real Estate Group

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NAVPOINT REAL ESTATE

CONFIDENTIALITY / NON-CIRCUMVENTION

NON-DISCLOSURE AGREEMENT

NavPoint Real Estate Group (“Broker“) has been retained as the exclusive Broker regarding the sale of the property located at the address noted below.

To receive an Offering Memorandum (“Offering Memorandum“) please read this Confidentiality Agreement and agree to the terms. The details and information contained within the Offering Memorandum were obtained from sources deemed to be reliable. Verification of the information contained within the Offering Memorandum are the sole responsibility of the Potential Purchaser. No representation is made to the accuracy of the information by Seller or Broker. THIS AGREEMENT is made and entered into by and between NavPoint Real Estate Group and “Potential Purchaser” and shall become effective when executed by Potential Purchaser or Potential Purchasers Broker.

A. Commencing with discussions held between their respective representatives the parties have pursued and expect to continue to pursue discussions (the Discussions) relating to the potential sale of:

In the course of these discussions, Seller has disclosed to Potential Purchaser and may continue to disclose to Potential Purchaser certain information of proprietary and confidential nature (“Confidential Information”).

B. Seller will provide to Potential Purchaser certain printed, typed and handwritten materials and other tangible materials containing or relating to Confidential Information (“Documentation”).

In order to protect the Confidential Information, both during the term of the Discussions and after their expiration or termination, Potential Purchaser agrees as follows:

  1. Potential Purchaser shall maintain the Confidential Information in strictest confidence and shall not disclose to any third party any Confidential Information received from the other party. In addition, Potential Purchaser shall ensure that its officers, employees and agents likewise maintain the Seller’s Confidential Information in strictest confidence and that such persons do not disclose such Confidential Information to any other party. Potential Purchaser shall not have the right to use, duplicate, reproduce, copy, distribute or disseminate Confidential Information except for purpose of the discussions and negotiations as needed.
  2. Potential Purchaser agrees to limit access to Confidential Information received from the Seller to its own officers and employees on the absolute need-to-know basis solely for the purpose of the Discussions, and to use the same degree of care in reserving the secrecy of the Confidential Information furnished by the Seller and/or Broker as it uses in preserving the secrecy of its own Confidential Information.
  3. Notwithstanding the conclusion or termination of the Discussions, Potential Purchaser shall continue to fulfill its obligations hereunder for a period of one (1) year from the date of disclosure. Upon termination of the Discussions, all Confidential Information, including all forms of Documentation shall be returned to the Broker, including any copies or adaptations made by the receiving party.
  4. The obligation of Potential Purchaser under Paragraphs 1 and 2 above shall not apply or shall cease to apply to any information which Potential Purchaser can demonstrate by reasonable documentary proof- (a) to have been in the possession of Potential Purchaser at the time it was first disclosed by the Seller and/or Broker; (b) was in the public domain at the time it was disclosed to Potential Purchaser; (c) entered the public domain through sources independent of Potential Purchaser and through no fault of Potential Purchaser; (d) was lawfully obtained by Potential Purchaser from a third party who is free to disclose such information to Potential Purchaser; (e) to have been at any time developed by Potential Purchaser independently of any disclosure from the Seller; or (f) has been in the possession of Potential Purchaser for more than five (5) years.
  5. Potential Purchaser shall not have any right to register any copyright, trademark, service mark or corporate name based upon Confidential Information or otherwise register or claim any right to use any Confidential Information disclosed to it by the Seller without the express written consent of Seller and Broker. Nothing herein, and no disclosure of Confidential Information or Documentation pursuant hereto, shall be deemed a grant to Potential Purchaser, whether by implication, estoppels or otherwise, of any right or license under any industrial property right of the Seller.
  6. The Discussions shall continue until the date on which an Agreement shall have been concluded or the date on which either party shall have given written notice to the other of termination of the Discussions. All obligations of the parties hereunder shall survive any termination of the Discussions.
  7. Each party acknowledges and agrees that the unauthorized disclosure or use of Confidential Information disclosed to it by the other party or any other breach of its obligations will result in irreparable injury to the party, which furnished the Confidential Information. Therefore, each party agrees that the injured party shall be entitled to receive injunctive relief in any legal proceeding instituted by such injured party.
  8. This Agreement shall be governed by, and interpreted and construed in accordance with, the laws of the State of Colorado, USA.

For purposes of creating a binding contract in determining the rights and obligations under such contract in any court of law, the parties acknowledge that a signature reproduced by either digital signature, electronic signature, facsimile or photocopy shall have the same force and effect as an original signature and that the original and any such copies shall be deemed one and the same document. In the event this Non-Disclosure Agreement is submitted electronically, this agreement is provided under the Uniform Electronic Transactions Act – Col. Rev. Stat. §§ 24-71.3-101 et seq. By submitting this agreement, you are confirming your agreement to submit this Non-Disclosure Agreement electronically, and your indication of agreement, along with information provided, will have the same force and affect as if this agreement was submitted manually and your manual signature was provided. You should retain a copy of this agreement for your records.

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