New Name, Familiar Hurdles: Can A $175M Revamp Bring Back Denver's 16th Street?

Denver’s most famous pedestrian corridor has a new look and a new name following a $175M construction project and a $100K rebranding. 

The question is, will it turn its fortunes around?

The reimagining of 16th Street Mall — minus the “mall” — is happening amid a broader shift in how commercial real estate is used downtown, and real estate professionals are keeping a sharp eye on whether the 16th Street makeover attracts new residents and retailers.

“Historically, downtown has been a leader, not just in terms of rents but in terms of demographics,” longtime residential broker and Northmarq Managing Director Dave Martin said. “It’s [historically] a higher wage earner that tends to live downtown. That’s not the case right now. It’s actually flipped. But I would expect that to flip back and revert to the mean.”

Retailers follow residents with discretionary income, Martin said. Retail availability was 5.6% across 20M SF of Central submarket inventory, according to CBRE’s first-quarter report, and the corridor saw 12K SF of positive net absorption.

But the city has had something of a residential exodus, driving rents up in the suburbs. 

CBRE’s Q1 multifamily report shows downtown rents averaging $2,129, just barely higher than far-flung suburbs like Highlands Ranch or the Highway 36 corridor. Anecdotally, Martin said he is seeing suburban one- and two-bedrooms priced up to $600 a month higher than comparable downtown units.

Martin said that he expects the revamp to attract young people, who will see the value in downtown living in lower rents and better access to sports, nightlife and cultural events.

“There's no reason for the south suburban markets to be getting higher monthly rents for very comparable product than downtown,” he said.

But downtown office woes could be a drag on the revival.

Vacancy in the core hit 35.3% in the first quarter, according to CBRE, with negative net absorption of 85K SF downtown. 

Meanwhile, about 27% of CMBS loans backed by downtown Denver office properties are in distress, according to Trepp, a function of reduced rent rolls running up against loan maturities. 

Even so, Martin sees a future for downtown in which retail and residential are more important than office use.

“I’m not so sure all this vacant office space really matters,” he said, calling much of it “economically and functionally” obsolete. 

“Even if we’re only at 65% of 2019’s physical occupancy, I don’t think it impedes the organic recovery of the residential market,” Martin said.

He expects downtown retail to shift toward a more neighborhood-focused mix that includes hardware stores, small grocers and takeout spots.

But for now, vacancy is still visible. Starbucks, Sephora, Chili’s and Corner Bakery Cafe have all left the corridor in recent months.

Branding experts and real estate professionals are optimistic about the 16th Street revival effort by the Downtown Denver Partnership.

But they are also clear: A name change won’t fix downtown’s core challenges.

“We talk about how a brand is made up of trust — a meaningful dialogue built over time,” said Jenna Capobianco, chief creative officer at Englewood-based branding agency Milesbrand. “It’s trust you build through meaningful interactions across every touchpoint.”

Milesbrand knows the playbook. In the 1990s, it helped brand Lower Downtown, or LoDo, as a fresh destination, aided by momentum from the rising Coors Field.

“There was so much energy about this underutilized place being reenergized,” Milesbrand President Dave Miles said, calling the 16th Street effort “analogous.”

The firm praised what it sees as a successful social media push and a recent block party that drew about 8,000 people to 16th and Welton streets for dancing, food and revelry to celebrate completed construction along the stretch.

Still, safety and long-term consistency will make or break the rebrand.

“That trust just has to be hammered again and again and again,” Capobianco said. “That’s what’s going to change people’s hearts and minds.”

CORRECTION, JUNE 27, 8:10 A.M. MT: The headline has been changed to more accurately estimate the cost of the project.