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DENVER-Despite about 30,000 layoffs and about 2 million sf of new space, the retail market is holding its own, according to a report by the Denver office of Marcus & Millichap. ”Recent evidence has indicated that the demand for retail is slowing, but the Denver retail market is expected to remain healthy over the next year,” says David Osborne, regional manager of the Marcus & Millichap office.

”The reduction in construction starts combined with lower interest rates are expected to keep the Denver retail market relatively stable,” he adds. ”In the near term, demand for new space is expected to remain moderate, pushing vacancies up slightly.”

Despite the recent round of layoffs, estimated by state budget czar Nancy McCallin at 30,000, the business service sector will create at least 25,000 new jobs this year, Osborne notes.

While unemployment is rising, it still remains below the national average.

The report notes that about 2 million sf of retail will be added this year and the Colorado Mills Shopping Mall will add another 1.2 million sf next year.

In addition, another 800,000 sf in projects could come on line next year.

Still, construction in the first half of the year is down about 30% from last year.

Retail vacancies are expected to rise another half to full percentage point, according to the report, up from 7% last year. Finally, increasing vacancies will keep overall average metro retail rents flat at about $15.90 per sf, the report notes.

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