Is Downtown Denver Set for a Revitalized Rebirth?
Denver is experiencing significant challenges in its downtown area, exemplified by the fate of Columbine Place, a 44-year-old office tower. Though its lobby is clean and updated, the building is largely vacant and struggling. The property has become emblematic of broader difficulties facing downtown Denver, where many older office buildings lack appeal and pose conversion issues for residential use.
Revitalization of Downtown Denver
Alison Berry, a vice president at CBRE, emphasizes the need for innovative solutions for distressed properties. Currently, the vacancy rate for downtown office spaces stands at 37.7 percent—approximately three times higher than before the pandemic, according to CBRE’s latest report. This staggering rate is likely understated, as actual foot traffic remains low, further highlighting the problem.
Contrasting Areas: LoDo vs. Upper Downtown
The dynamic between different areas of downtown creates a stark contrast. In lower downtown, known as LoDo, businesses thrive, and demand for space outstrips supply. This part of Denver boasts a near-zero vacancy rate in Cherry Creek North, with rents skyrocketing to the highest levels in the state. However, upper downtown near the state Capitol is filled with outdated towers and vacant spaces.
- LoDo: Thriving with a vibrant economy
- Cherry Creek North: 0.5% vacancy rate, high demand
- Upper Downtown: High vacancy and low attractiveness
Investments and Initiatives
Many businesses have opted to let their leases expire, placing a strain on the downtown economy. Over 5 million square feet of office space are categorized as distressed. Some properties have seen prices slashed by up to 80 percent. Among those purchasing these distressed properties are investors from Chicago and Los Angeles.
In response, the Denver Downtown Development Authority has greenlit several projects, including a $165 million initiative to convert the historic Petroleum Building into residential units. Local investment groups are exploring similar conversions, aiming to turn upper downtown into livable spaces, although many existing buildings face financial hurdles for such transformations.
The Future of Downtown Denver
Despite the grim outlook, optimism remains. U.S. Senator John Hickenlooper compares the current situation to Denver’s past challenges. Innovative public projects and community-focused investments laid the groundwork for LoDo’s resurgence in the 1980s. As Colorado grapples with potential economic recession, officials stress the importance of fostering a clean and safe environment in downtown Denver.
Security investments, including $3 million allocated for private safety measures, have led to a noteworthy 27 percent drop in overall crime since its peak in 2021. The focus on public safety is pivotal for attracting individuals and businesses to the area.
Conclusion
While upper downtown faces profound obstacles, the determination to revitalize this area remains strong. Creative solutions and strategic investments could pave the way for a renewed downtown Denver. The future may hold promise as local investors and city officials work together to breathe new life into these beleaguered properties.
