With one of the strongest regional economies in the country, Denver is once again supporting retail expansion. But with new competition for retailers and new desires on the part of shoppers, the road ahead isn't going to be easy, according to the speakers at our Denver Retail & Hospitality event.

Our speakers said retail is doing a bit better in metro Denver than many other markets. One reason is that local fundamentals are strong. For instance, metro unemployment is at 3.3% (it's 3.6% for Colorado), and retail and hotel job growth were up 3.5% over the last year. The residential market is strong as well, supporting retail growth, with home prices rising steadily.

Retail vacancies now average 5.6% in metro Denver, which matches the most recent low back in 1998. The market had 130k SF of positive absorption in the second quarter, driven by health and fitness tenants and grocery stores. Investors have taken notice, with investment capital plentiful for the right retail deals.

Here are SullivanHayes VP Michael DePalma, who moderated, Coventry Development Corp EVP Steve Mulhurn and Brinkman Partners COO Jay Hardy.

Retail may have recovered from the recession, but even in a growing market like Denver, the sector faces strong challenges, our speakers said. Not only are online sales a persistent worry—though perhaps not quite as much as believed—but consumers want more than ever from their shopping experience, and retailers are struggling to provide it.

In some ways, that's the same as it's ever been. The pace of evolution in the retail sector seems faster now, driven by new consumer technologies and easy access to information by consumers.

Above are CBRE SVP Jon Weisiger, who moderated, GGP senior general manager Pamela Scheneck-Kelly, Regency Centers VP Will Damrath and Evergreen Development director, acquisitions Erika Shorter.

The key to growth in the grocery sector is being able to operate in a number of urban and suburban markets and be more flexible, our speakers noted. It used to be that stores would have a few similar models, and they'd open whatever size seemed appropriate in a market. Now they need to work harder to find appropriate sizes and offerings for the various markets, especially in settings like urban Denver, where shoppers want not only convenience, but unique offerings and experiences.

Retailers are still trying to figure out who they need to be in a landscape changed by the internet and consumer tastes, and what mix of physical and online presence they need to succeed.

City of Lone Tree economic development director Jeff Holwell also spoke, pointing out Lone Tree has about 3.6M SF of retail space, representing roughly half of the commercial space in the city, serving an area with strong demographics.

The community's also still growing, especially to the south and east, as evidenced by the cranes visible from the site of the event. The light rail extension broke ground in May, which will add 2.3 miles to the system, and ignite the Ridgegate East development, which eventually will have 7,000 new homes and 2.3M SF of new retail.