In a year when downtown Denver office vacancy rates have staggered upward past 30% and with only a single new downtown office project in the pipeline, area commercial developers and brokers should be in a grim mood.

But they’re not and Cherry Creek is much of the reason why.

“It’s a hot place to be for the office market, and it’s happening because downtown has not been,” said Mike Martin, broker and owner of Cherry Creek Commercial.

He points down the block to the new 201 Fillmore project at 2nd Avenue, where NYSE-listed Antero Resources is planning to move its gas and oil management into 130,000 square feet with retail below, after saying goodbye to Denver’s Lower Downtown neighborhood.

While downtown’s office vacancies climbed in the fourth quarter to 31.5%, according to a CBRE report, various sources put vacancies in the Cherry Creek micro-market at somewhere between 1% and 6%.

Brokers said that success is taking place despite a premium that businesses pay now for a Cherry Creek address — $40 to $65 a square foot, as opposed comparable space in LoDo, perhaps at $35 to $50.

Martin adds that employers in some cases have to make square foot compromises for that tradeoff, but they are often willing to for a Cherry Creek presence.

The added employees on the sidewalk are sending retailers in Cherry Creek into ecstasy, while leaving residents in shaded blocks of luxury homes nearby a little wary, according to broker Karen Landers at Kentwood Commercial.

“When I talk to neighbors, they’re not terribly excited about all the offices,” said Landers, who made her own residential move to Cherry Creek after having lived in downtown’s Golden Triangle area.

“I love downtown, but I’m glad I live here now,” Landers said, noting that she still senses commercial and retail interest in LoDo but feels less positive about the core central business district (CBD).

“It’s very sad,” she told The Denver Gazette. “I feel like it’s gone downhill.”

She added that she has friends in Curtis Park and Denver’s River North (RiNo) that still enjoy the downtown experience.

“But midtown and uptown are pretty sketchy,” Landers said. “It needs more retail, and more people back to the office.”

That “live-work” component that was a cornerstone of downtown’s huge success with urban-residential development in the 1990s is now the catch phrase for projects headed into Cherry Creek North’s core east of York Street, as well as at Cherry Creek Shopping Center south across First Avenue.

Meanwhile, for the corners of 2nd Avenue with St. Paul and Steele streets, where the Piatti Ristorante had been a 27-year institution, Kentwood Cherry Creek broker Dawn Raymond is slated to be exclusive listing broker for Waldorf Astoria, a 5-story luxury condominium that carries the branding of the storied Manhattan hotel.

That project is deep in the city approval process, but Raymond said she already is seeing plenty of interest in the Waldorf — some of it from residents currently living downtown.

“I have an extensive list already,” said Raymond, who had handled sales on the highly successful NorthCreek luxury condo project on Detroit Street, as well as the Laurel project that abuts the Waldorf site on the south. She has a couple of resale units on the market there — at $1.8 million and $2.2 million.

Prices like that might have raised eyebrows before the pandemic, when the Laurel took shape. But they’re modest in comparison to potential pricing of the boutique-sized Waldorf, where 37 units designed by architects Shears Adkins Rockmore would range from around 2,000 feet and could command $2,000 a square foot.

“They’ll have full valet-concierge services, all the amenities you’d expect at the Waldorf Astoria hotel,” Raymond told The Denver Gazette.

Developer PMG, she said, is underway on a super-sized Waldorf in Miami to include both a hotel and for-purchase residential component.

At 100 stories, the Miami Waldorf would become the tallest skyscraper south of the Big Apple.

“It’s unbelievable, like a Rubik’s cube that’s twisting up,” Raymond said.

Nothing like that is headed into Cherry Creek, Raymond said. Local residents were quick to voice opposition to early plans for the Waldorf to top out at a higher profile. But Raymond said the building’s five stories will still deliver a rooftop amenity, and elevators opening to individual units.

Interest in those includes some from Europe and Asia, along with the pied-a-terre buyers who have Colorado mountain homes and want a place closer to the kids. But Raymond is also hearing from former clients whom she had placed in downtown back when the Ritz Carlton and the Four Seasons were among the hottest residential properties in the Mile High City.

Nobody’s asking about Denver downtown

Raymond said that her buyers looking at Cherry Creek then would want to see what contrasting units downtown would offer.

Now, the opposite is happening.

“Now, I don’t have any buyers asking about downtown,” Raymond said. “Now they want to see options in Cherry Creek.”

Meanwhile, that highly visible demand quickly overwhelms the supply situation in Cherry Creek.

“We have less than 250 condos in all of Cherry Creek North,” Raymond said. “We don’t have more than five on the market at any one time.”

Demand is further pumped, she added, by an aging population in single-family homes in Cherry Creek and south in Cherry Hills, now looking for single-level living.

“We just don’t have the inventory,” she said.

That situation, as well as the accompanying demand for high-quality retail, has pushed the area’s success over into 9CO — the 9th and Colorado redevelopment project 1.2 miles north, bordering the east side of Colorado Boulevard, where the old University Hospital had been.

“It’s the same customer market,” said Melissa Machell at developer Continuum Partners, pointing to how well the 26-acre mixed use project has sold and leased, both for its commercial-retail (220,000 square feet plus 65,000 square feet of offices), as well as residential components.

That includes around 900 units of mostly rental units, plus 36 townhomes at 8th Avenue and Ash Street, all sold, with two more blocks remaining for development.

Machell said the influx of attractive retail and new dining into Cherry Creek is being mirrored at the satellite area to the northeast.

“Culinary Dropout is open, and Postino wine café, also Blanco (Cocina and Cantina) by a phenomenal restaurateur from Phoenix,” Machell said.

She noted that 80% of new commercial space is leased, including an AMC reclining seat theater that offers alcoholic drinks and popcorn.

“Everybody’s preference is Cherry Creek, but what we offer is the same market base, along with free parking,” Machell said.

“No real estate guy is going to be frowned on for wanting to be in Cherry Creek North.”

However, Machell and other brokers noted that markets are cyclical, and that downtown could make a comeback if some problems are solved that currently have the CBD back on its heels.

“I think a huge change is coming,” said Machell, noting that she goes to office in downtown five days a week, and that Continuum is still working on a project at 16th and Market streets.

“They have cleaned (downtown) up considerably,” she said.

In the last several months, Denver Mayor Mike Johnston has focused on shutting down homeless encampments in the city and moving people out of the streets and into shelters. His administration also announced developing a new strategy to combat auto thefts, in particular the installation of cameras across the city, signaling his intent to curb crimes, notably in downtown Denver.

Machell added that downtown is still being hard hit by the work-from-home phenomenon, as well as the 16th Street Mall redevelopment, which has temporarily scarred a multi-block area in the heart of the CBD.

“It has drawn out way too long,” Machell told The Denver Gazette, while adding that the rerouted mall shuttle and city-sponsored bike lane projects add more problems to downtown’s side streets.

Broker Brad Arnold, who had sold East West Partners’ new-urban concepts including The Coloradan at Union Station, said downtown’s issues are portrayed out of scale with the actual situation in those neighborhoods.

“Downtown is the punching bag now,” Arnold told The Denver Gazette. “It does have problems, but those are up and down the Front Range.”

Arnold, now with Slifer Smith & Frampton, said he continues having conversations with LoDo residents who like their location, want to be close to the A Line to Denver International Airport, and to walk to Nuggets and Rockies games.

“That’s irreplaceable, you can’t do those things in Cherry Creek,” he said.

Meanwhile, the contrast between residential prices downtown and in Cherry Creek is way beyond that for commercial properties, Arnold said. The 334-unit Coloradan, overlooking Union Station, currently has eight resale units on the market from a one-bedroom in the mid-$400,000s to premium two-bedrooms from the $900,000s to $1.2 million.

“It’s all exciting,” Landers said. “But I really miss downtown. I wish they could figure that out again. We can have both.”