During the first 10 months of 2021, over 73,300 retail leases were signed across the United States, which equates to over 205 million square feet. This number is significantly more than 2020 and it’s predicted that by the end of 2021, the total number will surpass the amount of retail leases signed in 2019.
There has been a substantial decline in the demand for larger blocks of retail space, the number of retail leases signed for locations greater than 50,000 square feet or more dropped to an all-time low during 2021. During the first 10 months of 2021, only 203 retail leases exceeding 50,000 square feet were signed, compared to 330 leases during the same period in 2020. However, discount retailers, home goods stores and gym chains continued to expand in 2021. As of November 11, 2021, Dollar Tree leased 1,365,146 square feet, Target leased 1,202,995 square feet and Planet Fitness leased 786,004 square feet.
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Fort Collins/Loveland/Larimer County
In the Fort Collins/Loveland market, absorption has been positive for six consecutive quarters (20Q3- 21Q4), a first for the sub-market in the last seven years. In 2020, Q2 was the only quarter with negative absorption. Over the last 12 months, there has been 195,000 square feet of absorption with a sub-market of approximately 22,100,000 square feet. The current vacancy rate stands at 3.6%, which is less than the vacancy rate reported in Q4 2019, which was 4.3%. Additionally, there is 134,000 square feet of sublease space on the market, bringing the availability rate up to 4.9%. In the past 12 months, 161 lease deals were completed, with an average square footage of 2,360. There were only 10 tenants who leased greater than 5,000 square feet over the last 12 months, with the most prominent being AutoZone’s lease of 22,350 square feet at 1623 S. College Avenue in Fort Collins. Positive absorption is forecasted for the fourth quarter of 2021 and throughout 2022.
Sales activity rebounded after Q2 2020, with retail property sales of over $283 million over the past 12 months. Historical sales in the sub-market have been at approximately $140 million annually. The average price per square foot increased modestly to $234 in Q4 2021, compared to $223 in Q4 2020. The most notable sale over the past 12 months was an auto dealership on HWY 287 in Loveland, which sold for $10,442,880 at a 5.5% cap rate; at the time of sale, the property was fully leased to Tesla on a triple net basis for 10 years.
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Greeley/Weld County
The Greeley/Weld County retail market is comprised of 11,900,000 square feet of inventory, compared to an inventory of 21,100,000 square feet of retail in Larimer County. Over the last 12 months net absorption in Greeley was negative 117,000 square feet. The vacancy rate in Greeley was 1.8% at the beginning of 2020 and currently stands at 3.9%; after considering sublease space, the availability rate is 4.7%. Since December 2020, there have only been 48 lease transactions completed, with an average square footage of 2,827; only seven tenants leased over 5,000 square feet. The largest retail lease deal completed in the past 12 months was 15,000 square feet in Frederick, leased by Green Eyed Motors.
Since December 2020, retail property sales have topped $122 million dollars, the highest recorded retail sales volume in a 12-month period for the past decade. Historical sales in the Greeley/Weld County sub-market have been approximately $62 million annually. Since Q1 2020, the average price per square foot has increased slightly from $175 to $181 per square foot, with an average cap rate of 7%. In March 2021, a 220,247 square foot community center situated on 23.14 acres in Greeley sold for $20,455,593 or $106.79 per square foot. The property was 96% leased at the time of sale.
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Northern Colorado in 2022:
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Happy Holidays from all of us at Realtec!
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Realtec is here to help navigate the changing market
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CoStar Market Reports - Larimer and Weld County
Q4 2021
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GREELEY
(970) 346-9900
1711 61st Street, Ste. 104
Greeley, CO 80634
Mark Bradley, SIOR, CCIM
Nick Berryman
Tom Reznik
Gage Osthoff
Anthony Damico
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FORT COLLINS
(970) 229-9900
712 Whalers Way, Bldg. B, Suite 300
Fort Collins, CO 80525
Steve Stansfield, SIOR, CCIM
Erik Broman
Jeff Doran
Ron Catterson
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LOVELAND
(970) 593-9900
200 E. 7th Street, Ste. 418
Loveland, CO 80537
Ron Kuehl
Larry Melton
Patrick O'Donnell
Bruce Campbell
Jamie Globelnik
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