CoreNet Colorado: The Future of Cherry Creek Looks Bright!
By Katie Rapone
On May 9, CoreNet Colorado held an insightful panel discussion on the future of Cherry Creek that provided a look into the vibrant community’s past, present, and future. The event was held at the Janus Henderson Building, located at 151 Detroit Street in Cherry Creek North.
CoreNet Colorado Board Members Cynthia Martinez, corporate practice leader, The S/L/A/M Collaborative, and Dave Johnson, executive managing director, Cushman & Wakefield moderated the panel, which included: Nick LeMasters, president & CWO, Cherry Creek North Improvement District; Doug Wells, CEO, Broe Real Estate Group; Amy Cara, managing partner East West Partners; and Matt Joblon, CEO, BMC Investments.
Cherry Creek remains one of the strongest overall real estate markets in Colorado, making it one of the most attractive areas for development.
Cherry Creek at a Glance
- 13,500 residents
- 1000 businesses that generate over $84M in tax revenue for the City and County of Denver
- Employs 15,000 people
- 15.2M visitors/year
- 6917 existing residential units at the end of 2022 with an additional 591 units planned
- The average rent for a 1-bedroom apartment is $3,000/month and $5000/month for a 2-bedroom
- 1o54 existing hotel rooms at the end of 2022 with 250 additional rooms in the works
- 2.1M SQFT of retail with 88,783 SQFT planned and a vacancy rate of only 4.6% (end of 2022).
Live, Work, Play
There is no question that the pandemic had a significant impact on the way people live, work and play. According to Amy Cara, managing partner of East West Partners, for many people that meant increasing leisure time, including more time spent outdoors, “It meant making sure the workplace is an incredible place to be, so really thinking about creating a space where people can live, work, and play in the same place — Cherry Creek is really incredible in that way already.”
East West Partners’ new mixed-use neighborhood of Cherry Creek West — to be completed over the next decade — will create a front door for Cherry Creek and offer the best of urban living with exciting places to work, engaging civic experiences, and authentic retail and restaurants that embrace the Cherry Creek waterway. The project’s pedestrian-forward focus is expected to create a very urban, yet open feel that will become the epicenter of Cherry Creek. “Our connection to the creek that we are going to create is going to be great for everybody across Cherry Creek because it’s going to be so much more accessible,” said Cara.
Cherry Creek’s restaurant and bar scene is on track to rival any of America’s largest metropolitan cities. “If you look at the bars and restaurants that we have been involved in and the ones we have not, there has been tremendous growth across the board,” said Matt Joblon, CEO, BMC Investments. “When we did Forget Me Not, we had no idea what that place was going to do. The numbers are so out of control. On Thursday, Friday, and Saturday nights, we turn away 200 to 400 people per night.”
BMC is currently planning a second bar in the area with the view that they will need a third to meet the increasing demand.
Cherry Creek has become the leading leasing market in the Rocky Mountain region, attracting the highest demand for properties and spaces available for lease and sublease. Due to the high demand and relative lack of supply, Cherry Creek remains one of the tightest Denver office submarkets with a vacancy rate of only 1 percent at the end of Q1 2023.
Post-pandemic, Cherry Creek saw employees come back to the office in high numbers, far exceeding any other submarkets of Denver. According to the panel, most businesses in Cherry Creek are currently in-office five days per week. The reason for this can largely be attributed to Cherry Creek’s amenity-rich work environment as well as its reputation as a safe place to be.
Even with the existing 3.4 million square feet of office space the 290,000 square feet under construction and an additional 1 million square feet of proposed office space, there is currently no direct space available in existing Class A buildings in the community. Office rent growth continues to be strong with the average triple net asking rate increasing by 34.4 percent since Q1 2020 to an average of $40.86/SQFT.
BMC and Los Angeles-based Prism Places were recently selected to redevelop Clayton Lane in Cherry Creek North. The mixed-use redevelopment plan will transform the vacant Sears site and surrounding retail west of Clayton Lane into more than 430 multifamily units and a thoughtfully planned retail district. Per Denver’s Expanding Housing Affordability policy, 10 percent of Clayton Lane’s multifamily units will be priced at 60 percent of the area median income.
The retail transformation includes adding more than 100,000 square feet of pedestrian-friendly retail space and restructuring existing storefronts on Clayton Lane and Second Avenue into small-format floor plans preferred by boutique shops and restaurants. In an effort to improve inclusivity and increase the number of local and minority-owned businesses, two of the retail spaces are planned to be “affordable retail,” where the venture is committed to partnering with minority-owned businesses for retail and restaurants as well as supporting minority artists by using their work in the common areas or in a gallery.
While retail isn’t the main revenue driver across the street at Cherry Creek West, East West Partners plan to incorporate diversity into the experience. “Leaning into the local focus of Cherry Creek is important. That has made Cherry Creek a special place and so continuing to emphasize all of that is something we will be focused on,” said Cara.
Some of the current and future challenges that Cherry Creek faces include increasing property taxes, permitting delays, and barriers to entry, as well as Cherry Creek’s car-centric culture and reputation as a transportation desert. There is also a common misperception that Cherry Creek has a lack of parking. Consequently, the panel stressed the importance of finding a way to encourage more visitors to utilize the six public parking garages, instead of street parking which is often in short supply.
Cherry Creek’s impressive growth is somewhat of a double-edged sword. While there is much demand in Cherry Creek, the supply is limited.
“We’re not Rodeo Drive, we’re not an international city yet, but the comparison to demographics and barrier to entry to Beverly Hills is incredible, it’s amazing how similar they are,” said Joblon. “Long term, when this area gets built out, everyone is going to want to be here and there’s going to be no ability to deliver new supply. It’s simple supply/demand fundamentals that tell you rents are going to continue to go up. As long as we can get through difficult periods of time, I think the future is super bright from a pricing standpoint.”
Nick LeMasters, president & CWO of Cherry Creek North Improvement District — who implements the board’s strategic direction and BID’s plans to creatively plan, manage, and promote Cherry Creek North — is confident that despite any future challenges the community may face, it will continue to thrive.
“Cherry Creek continues to be an extraordinary area and it’s a privilege to be involved,” said LeMasters. “I like to say our best days are ahead of us, I truly believe that. This is the consummate mixed-use development in this city and I think that will continue for many years.”