A New Era of Retail in Downtown Denver
This article, written by Randy Thelen, Vice President of Economic Development, will appear in the August issue of Retail Properties Quarterly, a Colorado Real Estate Journal publication.
Earlier this year, Amazon became the second most valuable company in the United States. From selling books to selling everything, Amazon has changed the face of retail across the country, around the globe and even Downtown Denver.
At the Downtown Denver Partnership, we are driven to build an economically powerful center city. As part of that vision, we work closely to retain and attract retail, hotel, and food and beverage businesses to the downtown core. This mix of businesses energizes the street life, making our downtown a destination for regional residents as well as international visitors. With the Amazon-led disruption to retail, how has our downtown fared? You may be surprised to learn that we are doing exceptionally well.
Today, downtown has over 4 million square feet of retail space—more than ever before. And our vacancy rate is down to 3.3%, near a record low. Another indicator of strong retail performance is the rising rents, which today average $24.90/square foot.
While some traditional shopping centers are struggling in this new retail environment, the mix of residents, visitors, and employees downtown produces a steady flow of potential shoppers each day. Millions of people walk the 16th Street Mall each month. These are people that are seeking a downtown shopping experience, making a day of exploring the many shops and restaurants that downtown offers.
The strength of downtown retails is borne out in retail sales numbers as well. Through city sales tax collections, we can see that all sectors of downtown retail have seen solid growth. Since 2011, Restaurant sales have climbed over 40%; hotel sales have grown a whopping 129%; and clothing sales are up 72%. Rumors of the death of retail have been greatly exaggerated.
Retailers have gotten smarter, offering a more service-oriented in-store experience to differentiate from one-click shopping online. And by locating downtown, the retailer is attracting a clientele that is intentionally seeking out that more fulfilling experience. The downtown retailer also has the luxury of a multitude of customer types. The downtown residential population has tripled since 2000, bringing more ‘rooftops’ for retailers to sell to; the number of hotel rooms downtown has doubled in the past 10 years, putting more ‘heads in beds’ that will wake up looking to spend money on their vacation or business trip; and with 135,000 downtown employees, there is a near endless supply of ‘wallets.’
Top retailers have noticed the shift of energy to downtown, with Uniqlo, H&M, Whole Foods and now Target opening in July.
Yes, retail has changed. For the better. Today’s consumer has the convenience of online shopping plus an in-store retail experience that has stepped up to the competitive challenge by providing greater service and an enhanced experience. Take a look around downtown and you’re guaranteed to see full shopping bags and smiling faces. People are enjoying this new era of retail.