Feb 15, 2022 - News

Builders are still leaning into a pandemic-stricken Denver

Total valuation of building permits issued in Denver, by year
Data: Denver Community Planning and Development; Chart: Axios Visuals

Denver proved a popular place for real estate development in 2021.

  • Now the challenge is reenergizing its downtown core.

Why it matters: Despite the city's center taking repeated blows to its image amid the pandemic, the 2020 protests and a surge in violent crime, developers continue to bet on Denver's long-term health.

  • Even one of the world's wealthiest businessmen, Jeff Bezos, is opening an office in the metro area for his space company, Blue Origin.

State of play: Denver permitted $4.5 billion worth of construction in 2021, down 13% compared with 2019 but still more than 2017 and 2018 levels, per Denver Community Planning and Development data provided to Axios.

  • Residential building permits were also up nearly 25% from December 2020 to December 2021, according to a recent report from the Metro Denver Economic Development Corporation.

Of note: Valuation is determined by the sum of the labor and materials used on construction sites and a measure of the size and complexity of projects, Denver Community Planning and Development spokesperson Laura Swartz tells Axios.

Driving the trend: Much of the city's permit volume stemmed from larger commercial and residential projects in 2021, with a good deal of that growth concentrated around the edges of the city's center, in Lower Downtown, the River North Art District and Five Points.

  • On the contrary, 2020 was driven by smaller residential projects, such as remodels and home repair work, Swartz says.

Yes, but: City officials are still wrestling with the challenge of reviving downtown Denver and attracting new companies to the area. Office vacancy rates sat around 14% in the fourth quarter of 2021, 2 percentage points higher than the previous year, and the retail space vacancy rate hovered at about 5%.

  • Meanwhile, at least one downtown business has implemented a fee to counterbalance shoplifting.

What's next: To draw businesses back, Denver is launching a new pilot program that will offer five companies rent-free space and $20,000 in services to open a pop-up shop on the 16th Street Mall.

  • The goal is to "reimagine downtown one storefront at a time," the program's website reads.

The bottom line: A shadow continues to loom over downtown Denver, further bringing into question the future of a core piece of Colorado's economic development.

This story first appeared in the Axios Denver newsletter, designed to help readers get smarter, faster on the most consequential news unfolding in their own backyard. Subscribe here.

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