The downtown commercial core is nearly full, with a vacancy rate reaching pre-recession percentages.
About 30 retail leases have commenced in the past year, which is more than the usual handful that occur annually, said commercial real estate broker Karen Setterfield.
With the increased level of activity, there is a consensus among commercial brokers that the retail vacancy rate is somewhere between 2 and 5 percent, which pales in comparison to last year around the same time when it hovered around 9 or 10 percent. (At the beginning of 2008, less than 1 percent of restaurant, retail and office spaces were empty in the downtown core.)
With spaces filling up, there are fewer bargain leases to be made, said Bob Langley, a downtown broker.
“The market is very, very tight right now,” he said. “There are very few spaces available. A year ago you had your selection to pick from and there were deals to be made. There are no more deals.”
The last real bargain lease was made a year ago, Langley added.
Commercial brokers also agreed that rent prices have stabilized and as a result, the pop-up retail stores that once were popular in the local market are no longer a viable option for prospective renters. Pop-up retail is a trend of opening short-term stores, which are known for their spontaneity and fleetingness.
“I think the pop-up concept is a thing of the past,” said broker Ruth Kruger. “The people looking now are looking for long-term leases and landlords are not looking to lease to pop-up businesses.”
The pop-up concept is something that thrived in Aspen over the past couple of years in response to the Great Recession when landlords were willing to tolerate short-term, discounted leases in order to keep their buildings full, said Kruger. But now that the market is stabilizing and there are fewer options for prospective renters, landlords no longer need to rely upon them, she said.
The shift toward long-term leases is a healthy trend in the retail sector, Kruger said, noting that pop-up businesses are a short-term solution but not necessarily good for the marketplace in the long run.
The 30 leases signed in the past year do not include pop-up stores, Setterfield said.
Meanwhile, lease rates have stayed the same over the past year with high-profile stores going for about $125 a square foot and less desirable storefronts going for about $50, said commercial broker Bill Small.
Those numbers reflect a 30 to 40 percent reduction in lease rates that took effect after the recession, but the brokers agreed prices aren’t getting any lower and it’s just a matter of time before they go up again.
“The market is definitely stabilizing,” Small said. “I haven’t seen any upward pressure yet but that’s certainly the next step.”
With prices holding steady and fewer places vacant to lease, some brokers say that the fall off-season shuffle will see less activity than in the past two years.
Noori’s Collection is moving three doors down on the Hyman Avenue mall and a national store called Crazy Shirts is taking over the location at 413 E. Hyman, while Bright and Shiny Things in Snowmass is opening a second location in the core at 306 Mill St. Helly Hansen is moving, although its new location has not been announced, and a Free People clothing store, which is owned by Urban Outfitters, is opening in the location of Blu Phoenix.
A new restaurant will be opening in the former N9ne Steakhouse spot at 414 E. Hyman. The new eatery has not been named yet but it is due to open Dec. 1. Aspen Over-easy Cafe is opening in the former Oy Vey Cafe location at 304 E. Hopkins and will serve breakfast and lunch inside, or to the Aspen Brewery located upstairs. Finbarr’s Irish Pub, at 415 E. Hyman, also is preparing to open its doors to the public in November. The old Bentley’s space in the Wheeler Opera House is being renovated and a new restaurant will open there in December.