LoDo’s Market Station, which spans a city block of retail, office and apartment spaces, wasn’t designed with COVID-19 in mind, but it has nonetheless weathered the pandemic. Finished last year, it offers a glimpse of what’s in store for downtown Denver in the coming months.
“Market Station is the perfect example of both the resiliency of downtown Denver and its bright future,” said Mark Falcone, CEO of Continuum Partners LLC, which developed the site.
The development is home to 82,000 square feet of shopping, 95,000 square feet of office space and 225 residences. Roger Pecsok, Continuum’s development director who oversaw the project, said its design was first introduced around 2015 – years before COVID-19 would challenge metropolitan areas nationwide.
Denver is no exception. Stay-at-home orders kept employees from their downtown offices, shuttered businesses and emptied city streets. Before the pandemic, the downtown area saw an average of 250,000 people daily. In March and April 2020, that number plummeted to 40,000-50,000, according to a report by the Downtown Denver Partnership.
Last year brightened the city’s outlook. More than 10 companies signed new office leases for downtown spaces over 20,000 square feet between May 2020-2021, the report detailed. Blocks from Market Station, several businesses migrated to the area, including company Red Canary, firm Lewis Roca Rothgerber Christie LLP, firm Perkins Coie LLP and firm Dorsey & Whitney LLP. The city is considered the No. 3 market for large investors, falling behind the Texas cities of Austin and Dallas/Fort Worth.
Market Station isn’t the only project completed last year either. The Colorado Rockies developed a mixed-use complex called McGregor Square, and the University of Colorado Denver built a residence hall. Two new apartment buildings – X Denver and The Fitzgerald – are also new additions to the Denver skyline, according to the Downtown Denver Partnership. An additional 14 projects are under construction right now, with the Colorado Convention Center expanding this year.
In 2021, Denver also ranked as the top city where millennials are moving, the third-best job market, and fifth-fastest growing large city, the report listed. The community is now inching again toward normalcy in 2022, with a sinking number of COVID-19 cases, access to vaccines and stabilized hospital rates, the city and county government reported on Jan. 31.
Still, Philip Kranefuss, head of real estate at company Homie Colorado, remains skeptical over the rebound of downtown Denver, as trends indicate that the pandemic has altered social habits – and some of those changes may linger. For instance, parking costs and traffic might not be considered worthwhile by some if they’re still uncomfortable socializing in bars or partaking in nightlife, he said. Potential renters could also be more openminded toward the affordability and yard space of suburbia over downtown apartments, Kranefuss added.
That’s not to say that he hasn’t noticed crowds in his latest visits to the area or transplants from Los Angeles and Washington, D.C., resettling in the city, but “you’re seeing a bit of that slow bleed” that occurs over time, Kranefuss said in a telephone interview. “It’s not an ideal picture for downtown.”
However, Pecsok pointed to the residential demand as a “crazy bright spot in the market,” even as the pandemic initially walloped the retail and office sectors. Market Station encompasses two residential communities: The Flats, which are described as “modern” units from 400-1,000 square feet, and Fourteen 45, which are “luxury” apartments from 900-1,750 square feet.
Residents can choose from studios, one-bedrooms, and two-bedrooms. The price tag currently runs as low as around $1,700 at The Flats or as high as more than $7,000 at Fourteen 45, according to the website’s available floor plans. Still, renters keep coming, with Falcone highlighting that the residences are 80% leased.
The retail options at Market Station are also expanding. Topo Designs will open a 1,000-square-foot store this spring, confirmed Alana Watkins of VOCA Public Relations. Water Grill, a seafood restaurant founded in California, also recently launched its Denver outpost at 1691 Market St.
These spots will join a community of other retailers, including Milk Tea People, Danner Inc., and Thule Group AB. Several of them are performing at over $500 per square foot in sales, Watkins added, citing new data from the leasing division.
“We really haven’t lost any tenants,” Pecsok said. “We’re positioned as well as we could be as anybody coming out of the pandemic.”
Falcone described Market Station’s office space as nearly fully leased, with anchor tenants now including JPMorgan Chase & Co. and Deloitte Touche Tohmatsu Limited. Monica Skok, region manager of JPMorgan Chase’s commercial bank, said “it’s been worth the wait” to bring her company’s new home base to Market Station.
“This is a serious investment that reflects our deep commitment to downtown Denver, our clients, customers, communities, employees and the entire Colorado market,” she added in a statement.
Chase, which moved out of the skyscraper at 1125 17th St., also plans to establish a couple of more Denver branches this year, with a recent opening in the Lowry neighborhood.
However, the future of the office market is uncertain, with many companies still opting to let their employees work from home or on a hybrid schedule as the omicron variant continues its spread. Pecsok predicts that, while the tech industry and others could eventually choose to forgo traditional offices, another “subset” of businesses might be more inclined to take those spaces.
“Downtown’s always been the most desirable place to have an office,” Pecsok said. “For all the reasons it was before, it’s going to continue to be.”
Michael Kercheval, executive director of the University of Colorado Boulder’s Real Estate Center at the Leeds School of Business, agreed that prospects look positive for downtown Denver, because of the strength of its office market, which boosts the residential sector in turn. He highlighted the city’s attractiveness to younger demographics, its quality of life, its proximity to the West Coast, and the “relatively reasonable” prices for rent.
“Denver’s desirability as a place to live can’t be replicated,” Kercheval said in a telephone interview.
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