"While construction was moderate, with about 150,000 sf of newconstruction for the period, over six million sf remains in the'under construction' inventory, according to the report. Includedin the pipeline are several regional serving malls and lifestylecenters in their first phase of construction, consisting of severalphases in multi-year build-out plans.

Investment activity, the report notes, remained strong, witheight retail properties totaling more than $3 million tradinghands. Capitalization rates remain low, ranging to 7% to 8% forquality centers, the report notes.

The report, warns, however, that the retail market could beimpacted by Mervyns, which plans to close eight of its nineColorado locations in the near future as part of a nationalcutback. All six Denver-located Mervyns will be closed. "Thisshould put a significant dent in the single-tenant sector, asMervyn's current buildings range from 50,000 sf to 80,000 sf,"according to Frederick Ross.