Retail

By Brandon Wright, Associate, Blue West Capital Retail properties in Colorado have experienced significant cap rate compression over the past five years and are selling for premiums compared to most markets across the country. Since 2019, the average cap rate for a single-tenant retail property in Colorado has compressed by 79 basis points, while cap rates for multi-tenant retail properties have compressed by 74 basis points. Cap rates this year for single- and multi-tenant retail properties in Colorado averaged 5.42 percent and 6.10 percent, respectively, through September 2022. Nationally, the average cap rate for these two property types were 5.62 percent and 6.53 percent. Cap rates in Colorado have remained compressed despite various headwinds facing the market. There’s a notable supply and demand imbalance of high-quality properties. The limited inventory of available properties and strong national demand for Colorado properties has helped keep cap rates near record lows. Public and private REITS, family offices, high-net-worth individuals and 1031 exchange investors remain optimistic on Colorado for its long-term upside and growth, and are looking to deploy capital here.  Colorado has a vibrant and diverse economy, in addition to strong demographics that include a young and educated workforce. It is the fifth most educated state, …