Cherry Creek is slated to transform into an even hotter spot to live, work and play in the coming years, with more than a dozen real estate projects — including a $1 billion mixed-use development — in the works that aim to attract more attention to the neighborhood.
Denver’s well-to-do neighborhood, which lines Cherry Creek itself, already attracts travelers with its hotels, such as Hotel Clio and Halcyon, and foodies with its fine dining options — Hillstone, Elway’s and 801 Chophouse among them. It’s also a destination for retail therapy, with the Cherry Creek Shopping Center and blocks of stores throughout Cherry Creek North.
But Blueprint Denver, the land use and transportation plan that projects the future of Colorado’s capital city, forecasts Cherry Creek will become a “regional center” by 2040, with new housing and job growth.
Developers appear eager to stake their claims in the neighborhood, most notably with the planned Cherry Creek West — a 12.5-acre development that would raze the largely vacant west end of the Cherry Creek mall and transform its western parking lot into a mixed-use community. .
Overseen by East West Partners, a real estate developer in Denver for more than two decades, the Cherry Creek West development would extend from University Boulevard to Clayton Lane, and First Avenue to the creek itself.
East West Partners is aiming to include new office, retail and residential space in the development, said Amy Cara, managing partner. The project is expected to cost about $1 billion.
Denver City Councilman Chris Hinds, who represents District 10, said Cherry Creek West is one of around 15 new projects — mostly office developments — underway in the neighborhood.
Even COVID-19 didn’t dim Cherry Creek’s growth in popularity. The neighborhood “seemed like it got even more vibrant and fun to be in” throughout the pandemic, said Charley Will of commercial real estate and investment firm CBRE, adding that sales records, leasing demand and development activity all attest to it.
Cherry Creek is considered a Denver neighborhood with more access to opportunity and less vulnerability to involuntary displacement, according to Blueprint Denver. It’s labeled a highly-dense employment area, alongside downtown and the Tech Center.
“Cherry Creek has become the No. 1 leasing market, investment market for commercial space in the entire Rocky Mountain region,” Will said. He foresees that trend continuing into the future.
The neighborhood has “always” sat among the top three commercial real estate markets in the state, if not the entire Rocky Mountain region, alongside Denver’s Lower Downtown/Union Station and Boulder, Will added.
But values continue to rise in Cherry Creek. Ten years ago, the record price per square foot was $393 with CBRE’s sale of the 100% leased Janus Capital Group World Headquarters building at 151 Detroit St., compared to $842 per square foot for a recent sale of the property at 270 St. Paul St., which is 67% leased, Will said.
He described Cherry Creek as a very small market with an “imbalance of demand versus supply.”
Historically, the majority of the area’s office tenants were made up of financial advisers and hedge funds. However, over the last two years, that tenant base has broadened noticeably to the energy, real estate, insurance, health care and technology sectors, he said.
Plenty of new projects will be built out in the area over the next decade, but the approach will be “much more measured” due to land constraints and zoning requirements, Will said.
Cherry Creek’s “new front yard”
One of the most visible developments will be Cherry Creek West. Its north end is planned to include a public plaza and market. The south side would feature a green space that lends itself to live performances and another public plaza. A dedicated two-way bicycle track is also in the plans.
An underground parking structure would be nestled beneath the site, which would host seven buildings ranging from eight to 13 floors in height. But “we have not made a final determination as to how any of the individual buildings will be built,” Cara said.
They would construct both luxury residential space and affordable housing on site — the latter of which Cara described as “a really nice addition to Cherry Creek” that hopefully helps the area’s workers live in the neighborhood.
East West Partners’ mission for the project is “to create a vibrant, people-centric neighborhood that embraces the creek,” serving as Cherry Creek’s “new front yard,” according to a presentation shown at a community information meeting last month.
“Cherry Creek doesn’t have a gateway,” Cara said in an interview. “You’re greeted as you’re coming from downtown by two parking lots: one for Whole Foods and one here for the shopping center.”
She called it a “missed opportunity,” as “we don’t have quite the same car and outdoor parking lot culture” anymore. Cara also pointed to the current lack of publicly-accessible green space in Cherry Creek.
Discussions about Cherry Creek West started in 2015, she said. The Buell Foundation owns the site, and is providing a 99-year ground lease to East West Partners.
If all goes as planned, construction will start in the third quarter of 2024, with the first buildings likely available for occupation in 2027. East West Partners also developed the residential neighborhood Riverfront Park, and served as co-master developers of Denver’s Union Station.
Evolving market demands
But Cherry Creek West is not the only development in progress.
Nick LeMasters, president and CEO of the Cherry Creek North Business Improvement District, pointed to several projects in the works within his district’s boundaries, which extend 16 blocks from First Avenue to Third Avenue, and from University Boulevard to Steele Street.
One aims to build a new mixed-use office building at 235 N. Fillmore St. Another redevelopment at 300 N. Fillmore St. would result in a four-story mixed-use office, restaurant and retail building, according to public records.
A prospective new five-story, multi-unit residential building would be constructed at 165 N. Madison St. A project at 299 Fillmore St. is converting a retail gallery space into a restaurant.
“For the first time, really, in many, many, many years, we’re starting to see development on the north side of Third Avenue,” LeMasters said. “Some of those buildings have probably outlived their useful life, and development companies have come to the table and are paying, from what we understand, premium pricing for the ground.”
Right now, two projects are under construction in that area, with the potential for two or three more over the next few years, he added.
It’s not a single developer calling the shots in Cherry Creek North’s real estate ventures, either. LeMasters listed Elevation Development Group, the Broe Group, Stillwater Capital, BMC Investments and Midwest Property Group Ltd. as companies that are working to secure their slices of the neighborhood.
Today’s rush of retail and office development in Cherry Creek follows a trend largely sparked by earlier changes in the neighborhood’s residential market, said Craig Ferraro, adjunct professor in real estate at the University of Colorado Boulder.
Cherry Creek North used to consist of bungalows built in the 1930s and 1940s, but homes underwent significant upgrades around the 1990s, he said. Houses were scraped and replaced with smaller mansions, spurred in part by the neighborhood’s proximity to downtown Denver and the Cherry Creek Shopping Center.
Cherry Creek benefited from more than $170 million in private investment in the 2000s, resulting in new housing stock, streetscape improvements and more, according to the 2012 Cherry Creek Area Plan.
Ferraro noted the development of multi-family condominiums and apartments around the last decade.
To secure an apartment in Denver, renters spend an average of $1,994 a month for their spaces, reports RentCafe, a nationwide apartment listing service. The site ranks Cherry Creek as one of the city’s three most expensive neighborhoods, with an average monthly rent of $2,518.
“You had folks moving into that area, upgrading their residences, and, then, that led to people wanting to be close to some unique retail,” Ferraro said. “That has led now to the development of the office space there.”
Community eyes new projects
Hinds, the Denver councilman, said he sees “a lot of promise” with Cherry Creek West, particularly because its developers are considering the needs and wants of “people over cars,” as in the case of the underground parking garage.
As Denver both densifies and builds higher, the development’s proximity to the creek — he called it a “treasure” for residents — will help promote “connections to the planet,” Hinds said.
One community concern is the prospect of traffic worsening. That perspective plays into a broader problem in Denver, which the city can address by offering viable alternatives to cars and better protecting bike lanes, Hinds said.
Lou Raders, president of the Cherry Creek North Neighborhood Association and chair of the Cherry Creek Steering Committee, said they’re closely following the progress of Cherry Creek West, as it will not only potentially affect transportation, but also “impact all of Cherry Creek and surrounding neighborhoods.”
The group does not immediately disapprove of a specific project at this time, with Raders adding that developments currently being built in the business district have been presented to the neighborhood and are in line with Cherry Creek North zoning.
Raders warns that projects that either don’t align with zoning or the 2012 Cherry Creek Area Plan “will likely receive substantial resistance.”
And “many in the neighborhood are tired from all of the construction,” she added.