Although the Cherry Creek North retail district is still bringing in the business, there are still nearly just as many retailers closing their doors in the district as there are opening them up for business reports the DenverPost.com. Why? According to many experts, the cost of renting a retail space within the district is simply too much to justify opening up a store there. Nonetheless, owners of the retail space would much rather keep the space vacant than bring down their rent expectations.
“Cherry Creek is still the strongest retail submarket in the metro area,” said Mary Beth Jenkins, who is the president of The Laramie Co. “This is a destination area that draws from a six-state region. Regardless of the economy and the vacancy, this is the one location in town that will be the last to crater.”
In other words, despite the economic downturn, retail space in the Cherry Creek North shopping district isn’t likely to see a rent decrease any time soon. With the popularity of the shopping district combined with the fact that the Cherry Creek North business Improvement District is moving forward with plans to invest $18.5 million into the district in order to install new benches, lighting, signage and landscaping, retail space in the area is simply far too valuable for the owners to justify bringing down the costs.
“Owners in Cherry Creek are sticking to what they used to be getting and saying they’ll just keep the space vacant,” said Susan Karsh, who is the managing director at Frederick Ross Co., which specializes in retail leasing. “Rents are all over the place because there are a lot of independent (building) owners in Cherry Creek North who can do what they please. Different landlords have different financial considerations.”
According to Julie Bender, who is the president of the Business Improvement District, a growing number of merchants are also deciding to purchase their buildings. Just last year, for example, Stephanie and Lee Prosenjak purchased the 10,500 square foot building that currently houses their Cherry Creek Dance for $4.96 million. Similarly, Max Martinez and Scott Seale recently paid $2.6 million for the 6,200 square foot building that used to house Smith & Hawken. The pair plans to relocate Max’s women’s clothing boutique into the building. Interestingly, the former owner, John Sheridan, never intended to sell the building. But, after Smith & Hawken closed its doors and he was unable to release the building, he decided to go ahead and sell the building.
While some owners are selling their buildings, yet others are taking steps to prepare for the future. Don Sturm, who is the landlord of the JoS. A. Banks, is planning to extend the storefront in order to make the buildings fronting Filmore Plaza more inviting and accessible by pedestrians. Others are reinforcing their buildings in preparation for adding condos on top once the housing market turns around. Of course, moving forward with some of these plans will largely depend upon the residents and the changes they allow to be made to the neighborhood.
