Denver’s Cherry Creek is not only a retail giant, but now an “economic center of Denver.”

That’s according to Cherry Creek Alliance CEO Nick LeMasters, who spoke at an Alliance “State of Cherry Creek” event Tuesday.

“Today we stand with the Central Business District and DIA as one of the most important centers of commerce in this entire city,” LeMasters said.

Businesses want in, but there’s little space for them.

Cherry Creek had a record low vacancy rate of less than 1% at the end of 2023, according to a new report from Cherry Creek Alliance, an organization representing the neighborhood’s businesses.

Cherry Creek is the “one place where tenants will expand,” said Courtney Key, a commercial real estate broker with SullivanHayes Brokerage, at a panel hosted in Hotel Clio on Tuesday.

The neighborhood had 14.2 million visitors last year, the report found.

There’s many companies looking to get into Colorado for the first time and Cherry Creek is where they want to start, Key said.

An upscale Southern California jewelry chain Gorjana is set to open its first Colorado location on April 15 at Cherry Creek Shopping Center next to other high-end businesses like Neiman Marcus.

And some brands are willing to wait years to get in.

Whole Foods co-founder John Mackey’s health and wellness venture Love.Life is considering opening a location in Cherry Creek, Key said about helping them find a space — but it might not open until 2028.

“You have groups that are coming from out of the market. They’re really selective,” Key said. “They’re looking at the whole country so they can be patient to decide where they want to go.”

Major source of tax money for the city

The Cherry Creek neighborhood made $112 million in tax revenues for the city and county of Denver in 2023, according to the report.

Most of it was from retail sales taxes.

Retail sales produced nearly $63 million in tax revenues last year, the report found. It slightly dipped from 2022, but the report said it was still strong in lieu of pandemic rebound highs.

Clothing and accessory stores made up 41% of sales. Restaurants and hospitality were second at 20%. Home furnishings were at 11%.

About 5% of Denver’s retail tax revenue comes from Cherry Creek’s businesses and restaurants.

Expensive rents

With low availability, Cherry Creeks retail rents are higher than most of Denver.

Rents did drop at the end of the year from about $40 per square foot at the end of Q4 2022 to $30 per square foot in Q4 2023. The average for the metro area is around $25.

Businesses are willing to pay more for being in Cherry Creek, Key said. But some are getting priced out.

“Cherry Creek is changing,” Key said. “There are some local retailers that won’t be able to afford that anymore. But there’s also national retailers that can’t.”

With low vacancies, she added landlords have the power to be selective about what businesses come in. Consumers want a mix of local, regional and national options, Key said, which will be key to keeping Cherry Creek a destination.

More space is coming

Cherry Creek has more than 2.1 million square feet designated for shops, restaurants and other retail operations.

There’s currently four office projects under construction, all set to have retail space.

There’s 16 more developments that have yet to break ground but could bring more space between 2025 and 2027. Only two of those won’t include retail.

Space is a problem in Cherry Creek across its office, residential and retail real estate, said Pete Staab, real estate advisor for Newmark. When developers ask what amenities to put into their new office buildings, he said he tells them to skip it to maximize space unless it really adds value.

Workers can find a gym at the fitness center across the street or eat at one of the local restaurants.

“Cherry Creek is the amenity,” Staab said. ”You don’t have to heavily amenitize the buildings. People want to be here for that reason.”