No question about it. The Denver area retail market is strong.
Kenneth A. Himel, a retail broker at David Hicks Lampert, doesn’t think any of the brokers, developers and restaurateurs speaking at 2016 Retail Summit & Expo will question the strength of the market.
Himel will moderate a panel on the state of the market and 2017 outlook at the half-day conference on June 16. Registration opens at 7:15 a.m. at the conference at the Inverness Hotel and Conference Center.
The conference, sponsored by the Colorado Real Estate Journal, is expected to be attended by 500 people tied to the real estate industry.
But assessing the strength of the retail market is a “loaded question,” according to Himel.
“There is no question that the market is strong, but it is different than the last time we had a strong market,” before the Great Recession, he said.
The large-format, soft-good brick-and-mortar developments no longer are driving the market, he said.
“We aren’t seeing these million-square-foot centers anymore; they are not the driving force,” Himel said.
Rather, the market is being driven by urban fill restaurants and entertainment retail, he said.
“Really, retail is being driven by the strong economy nationwide and I think the Colorado economy is a little ahead of that,” Himel said.
“We are seeing a lot of job growth,” he noted.
The popularity of Amazon.com has changed the retail landscape.
“Absolutely,” Himel said. “That is especially true for hard goods like TVs and books and basketballs any other stuff you don’t have to try on before buying,” Himel said.
How do retail developers compete?
“It means creating more of a sense of place,” Himel said.
The proliferation of breweries, a trend that kicked off in Denver in 1988 when now Gov. John Hickenlooper opened Wynkoop Brewing in LoDo, before Lower Downtown was LoDo, is a perfect microcosm of the retail scene.
“Breweries are really going back to our roots and by that I mean when America was still a young country,” Himel said.
“We have just passed the numbers of breweries in the U.S. that we had in the early 1800s,” Himel said.
“That is pretty amazing,” he said. “It used to be that every little town had its own brewery,” which was the focal gathering place for the community.
Himel said he is looking forward to the conference to learn the perspective of others on the panels. Panels will focus on restaurants, grocery trends, lending, investment brokerage, retail as investments and developments.
He expects a number of panel members will be more bullish than he is.
“I am very suspicious of this strong market,” Himel said.
“I look at the numbers of what people are paying for property in and near downtown and when I look at where the rubber hits the road, I worry about who will be able to afford to pay the rents,” needed to support the purchase price, he said.
Not that the retail market’s strength is doomed to peter out.
“I think that creativity is going to be how we survive,” Himel said.
“Anyone who thinks our industry is going to change back to the way it was is mistaken. So we have to make sure this entertainment retail industry is turned into a long-term scenario and not a quick fix.”
One thing he isn’t worried about is that millennials are spending so much of their income on rent that they won’t have the disposable income to spend on restaurants, bars and of course, at breweries.
“No, absolutely not,” Himel said.
“There are two things behind that. No. 1, the American psyche has completely changed. When I was a kid, our family went out to eat maybe every six months or so. There had to be a special occasion, like a birthday.
“Today’s families go out a minimum of five to seven times a week. That does not change,” when people graduate from college and enter the work world.
“No. 2, I just read an article that more young adults are still living with their parents than anytime in history.”
By saving money on rent, they will have the money to hit bars and restaurants, he said.
Other Broker Update: State of the Market and 2017 Outlook panel members include:
- Jim Lee, vice president, CBRE;
- Bryan Slaughter, vice president, SullivanHayes Brokerage;
- Justin Kliewer, managing director, Newmark Grubb Knight Frank;
- Tony Pierageli, senior vice president, SRS Real Estate Partners; and
- Stuart Zall, president, Zall Co.
Restaurant Panel
- Robert Thompson, CEO/founder, Punch Bowl Social;
- Pete Turner, founder Illegal Pete’s;
- Mark Rogers, president, Roaring Fork Restaurants doing business as Cheddar’s;
- Bryan Dayton, proprietor, Oak at fourteenth and Acorn Denver;
- Richard F. Well, senior consultant, National Real Estate consultants; and
- Moderator, Jay B. Landt, senior vice president, retail, Collier’s International.
Grocery Market Trends
- Joel Starbuck, manager of real estate at King Soopers/City Market;
- Moderator: Howard Gerelick.
Lender Panel
- Peter Keeper, principal, Essex Financial Group LLC;
- John Markovich, senior vice president, FirstBank;
- Moderator: David J. Link, managing director, Northmarq Capital.
Investment Broker Panel
- Riki Hashimoto, executive managing director, Newmark Grubb Knight Frank;
- Jason Schmidt, executive vice president, JLL.
- Brad Lyons, senior vice president, CBRE/Capital Markets; and
- Jon Hendrickson, senior director, Capital Market/Investment Sales & Acquisitions, Cushman & Wakefield.
- Moderator: Garrett Matlock, senior vice president, investments, Marcus & Millichap.
Investment Panel
- Michael Podboy, chief investment officer, InvenTrust Properties Corp.;
- David Malin, vice president acquisitions & development, Vestar;
- Allen Ginsberg, managing director and principal, NewMark Merrill Mountain States;
- Daniel Sutherland, vice president of Capital Transactions, DDR Corp.;
- Deborah Godfrey, director of Acquisitions, Ramco-Gerhenson Properties Trust;
- Moderator: Mike Winn, vice chairman, institutional properties, CBRE/Capital Markets.
Development Panel
- Peter Cudlip, principal, Alberta Development Partners LLC;
- James McCandless, director of retail, Continuum Partners;
- Tyler Carlson, principal, Evergreen Devco Inc.;
- David Goldberg, principal, Miller Real Estate Investments;
- Jon Hauser, president, Drake Real Estate Services, LLC.
- Moderator: William Damrath, vice president, market officer, Regency Centers.
