"Denver will continue its steady recovery this year," says Adam P. Christofferson, vice president and regional manager of Marcus & Millichap's Denver office. "The driving force behind the rebound will be continued population and employment growth. North Denver's retail market is poised to make great strides over the next 18 months. With lease rates well below the market average and steadily declining vacancy rates, this submarket offers plenty of upside."

Highlights for the Denver market include:

* Employment will grow by 29,000 jobs, or 2.5%, which will increase consumer confidence and retail spending.

* Completions are forecast to total 1.4 million sf in 2005, as developers have noticed the market's turnaround and several large projects were recently completed, started or announced. One of the largest projects scheduled to be completed is Walnut Creek Town Center, a 540,000-sf center in Westminster.

* The vacancy rate in the Denver MSA dropped 50 basis points in 2004 and will decline by another 20 points in 2005, to 7.4% The submarkets to the south will have the lowest vacancy rates in 2005, with the Cherry Creek and the South submarkets expected to post vacancy of less than 3% and 5%, respectively.

* Asking rents are expected to rise by 2.3% by year end, to an average of $17.75 per sf. Concessions and tenant improvements will continue to be used in order to attract tenants, but the market will see this practice dwindle as the year progresses.

* Solid retail real estate fundamentals throughout the Denver MSA will help the market continue its rebound in 2005.