Cherry Creek is set to transform into an even hotter place 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 deliver more to draw attention to the neighborhood.
The affluent Denver neighborhood that lines Cherry Creek itself is already attracting travelers with its hotels like the Hotel Clio and Halcyon and foodies with its fine dining options – including Hillstone, Elway’s and 801 Chophouse. It’s also a destination for shopping therapy, with the Cherry Creek Shopping Center and shopping blocks throughout Cherry Creek North.
But Blueprint Denver, the land-use and transportation plan that projects the future of Colorado’s capital, predicts that Cherry Creek will become a “regional hub” by 2040, with new housing and job growth.
Developers appear eager to stake their claim in the neighborhood, particularly with the proposed Cherry Creek West — a 12.5-acre development that will level the largely vacant western end of the Cherry Creek Mall and its western end parking lot into a mixed-use community.
Overseen by East West Partners, a Denver real estate developer for more than two decades, the development of Cherry Creek West would stretch from University Boulevard to Clayton Lane and from First Avenue to the creek itself.
East West Partners is looking to add new office, retail and residential space to the development, said Amy Cara, Managing Partner. The project is expected to cost around one billion dollars.
Denver City Councilman Chris Hinds, who represents District 10, said Cherry Creek West is one of about 15 new projects — mostly office developments — underway in the neighborhood.
Even COVID-19 hasn’t tarnished Cherry Creek’s growing popularity. The neighborhood “seemed like it had become even more vibrant and entertaining during the pandemic,” said Charley Will of commercial real estate and investment firm CBRE, adding that record sales, leasing demand and development activity all bear witness to this.
Cherry Creek is considered a Denver neighborhood with more access to opportunity and less vulnerability to involuntary displacement, according to Blueprint Denver. In addition to the city center and the Tech Center, it is considered a high-density employment area.
“Cherry Creek has become the #1 leasing, commercial space investment market in the entire Rocky Mountain region,” said Will. He also sees this trend in the future.
The neighborhood has “always” been in 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 in Cherry Creek keep rising. Ten years ago, the record price per square foot for CBRE’s sale of the 100% leased Janus Capital Group World Headquarters building at 151 Detroit St. was $393, compared to $842 per square foot for a recent sale of the property at 270 St. Paul St., which is 67% occupied, Will said.
He described Cherry Creek as a very small market with an “imbalance between demand and supply.”
Historically, the majority of office tenants in the area have been financial advisors and hedge funds. But over the past two years, that tenant base has expanded noticeably into the energy, real estate, insurance, healthcare and technology sectors, he said.
Many new projects will emerge in the area over the next decade, but the approach will be “much more measured” due to land restrictions and zoning requirements, Will said.
Cherry Creek’s “new front yard”
One of the most visible developments will be Cherry Creek West. Its northern end is said to include a public square and market. The south side would feature a green space suitable for live performances and another public space. A separate two-way cycle path is also being planned.
An underground car park would be embedded beneath the site, housing seven buildings ranging in height from eight to 13 stories. But “we haven’t made a final decision on how any of the individual buildings will be built,” Cara said.
They would construct both luxury housing and affordable housing on site – the latter Cara described as “a really nice addition to Cherry Creek” that will hopefully help area workers live in the neighborhood.
East West Partners’ mission for the project is to create “a vibrant, people-centric neighborhood that hugs the creek” and serves as Cherry Creek’s “new front yard,” according to a presentation presented last month at a community information meeting was shown.
“Cherry Creek doesn’t have a gateway,” Cara said in an interview. “Coming from downtown you will be greeted by two parking lots: one for Whole Foods and one here for the mall.”
She called it a “missed opportunity” as “we don’t quite have the same car and outdoor parking culture anymore.” Cara also pointed out the current lack of green space open to the public in Cherry Creek.
Discussions about Cherry Creek West began in 2015, she said. The Buell Foundation owns the site and leases it to East West Partners for 99 years.
If all goes according to plan, construction will begin in the third quarter of 2024, with the first buildings expected to be ready for occupancy in 2027. East West Partners also developed the Riverfront Park residential neighborhood and served as the co-master developer of Denver’s Union Station.
Evolving market needs
But Cherry Creek West isn’t the only development underway.
Nick LeMasters, president and CEO of the Cherry Creek North Business Improvement District, pointed to several projects at the plants within his district’s boundaries, which stretch 16 blocks from First Avenue to Third Avenue and from University Boulevard to Steele Street .
One intends 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 proposed 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 into a restaurant.
“We’re seeing development on the north side of Third Avenue for the first time in many, many, many years,” LeMasters said. “Some of these buildings have probably exceeded their useful lives and developers have come to the table paying premium prices for the property, as far as we know.”
There are currently two projects under construction in this area, with the potential for two or three more in the next few years, he added.
Nor is there a single developer in charge of Cherry Creek North’s real estate projects. LeMasters listed Elevation Development Group, Broe Group, Stillwater Capital, BMC Investments and Midwest Property Group Ltd. as businesses working to secure their parts of the neighborhood.
Today’s rush of retail and office development in Cherry Creek follows a trend largely prompted by past shifts in the neighborhood’s housing market, said Craig Ferraro, associate professor of real estate at the University of Colorado Boulder.
Cherry Creek North used to be bungalows built in the 1930s and 1940s, but the homes underwent significant modernization in the 1990s, he said. Homes were scraped and replaced with smaller mansions, driven 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 during the 2000s, which resulted 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 over the past decade.
To secure an apartment in Denver, renters spend an average of $1,994 a month on their space, reports RentCafe, a statewide housing listing service. The location ranks Cherry Creek as one of the top three most expensive neighborhoods in the city, with an average monthly rent of $2,518.
“There were people who moved into this area, upgraded their homes, and that then led to people wanting to be close to unique retail,” Ferraro said. “That has now led to the development of the office space there.”
The community is looking for new projects
Denver City Councilman Hinds 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 lot.
As Denver both gets denser and builds taller, the development’s proximity to the creek — he called it a “treasure” for residents — will help foster “connections to the planet,” Hinds said.
A concern for the community is the prospect of deteriorating traffic. That perspective alludes to a broader problem in Denver that 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 are closely monitoring the progress of Cherry Creek West because not only will it potentially affect transportation, but it will also “impact all of Cherry Creek.” will and surrounding districts.”
The group is not currently opposed to any particular project outright, with Raders adding that developments currently under construction in the business district have been presented to the neighborhood and are consistent with Cherry Creek North zoning.
Raders warns that projects that do not comply with either the zoning or the 2012 Cherry Creek Area Plan “are likely to face significant opposition.”
And “many in the neighborhood are tired of all the building,” she added.