Denver Is At The Cutting Edge Of The Experiential Economy
Denver has been one of the nation's fastest-growing cities over the last 30 years, and promises to be over the next 30 years, because talented millennials want to be here, according to the speakers at our Denver State of the Market at the Denver Marriott City Center on Tuesday. Denver has what it takes to thrive in the new experiential economy.
The in-migration of young people is the strongest driver in the market, our CEO panel said. It is a prime differentiator for Denver as a growth market. There is a skilled labor shortage nationwide, especially in tech and in scientific fields, and that is exactly the kind of skilled labor that wants to be in Denver. The jobs will follow them.
These younger workers are looking for jobs, but also experiences. That is a keystone of the emerging economy, one based less on accumulation of goods and more on life experiences. Places that can provide better experiences — places that used to be known for their quality of life — have a growth advantage in the 21st century. Denver is one of those places.
Real estate development is an important factor in providing experiences, provided the development skews toward the authentic. The speakers said office, residential, retail and hotel developments all need to strive for authenticity, which is a little hard to define, but people know it when they see it. A successful new or redeveloped property provides "wow" moments for people who interact with the property.
The speakers cited the Dairy Block redevelopment as one place that will provide satisfaction for the experience-minded. Two of the panelists, Chad McWhinney and Walter Isenberg, head McWhinney and Sage Hospitality, respectively, and have partnered to create the Dairy Block.
Though the Dairy Block is a mixed-use project, with a hotel, retail, restaurants and office, it is more than that, the speakers said. It is an example of an authentic new place in Denver, and one that will activate its alley space, something Denver has not seen much of, though it happens in other cities, especially in Europe. The project also invites an infusion of pedestrian activity to a part of LoDo that has lacked it.
Our Power Women speakers said Denver is where millennials want to be, for the quality of life here and its affordability, especially compared with West Coast cities.
For office developers, Denver still offers opportunities in a number of ways. About 4.5M SF of office came online during the last three quarters, but much of it was pre-leased, so demand is still strong. Also, there is a stock of B buildings, especially Downtown and in the Southeast Suburban market, that can be redeveloped.
Demand for office space is high in part because employers want to step up to better space, and employees want new open space with array of amenities, which points again to the thirst for experiences.
The speakers said there are more women in commercial real estate than there ever have been, but there is a lot more room to grow, especially in property development, which is still very much male-dominated. A lot of women are joining the industry now by starting their own companies, which is fitting for Denver, which is an entrepreneurial city.
Still, obstacles remain. Balancing one's life with work is always going to be tough, and smaller real estate companies only have so many positions, so upward movement is slow. Also, there needs to be more outreach to young women and young minorities who might not know that a career in commercial real estate can be a viable option for them.
In the next Denver newsletter, we will cover three pairs of speakers from Denver's most prominent real estate families: the Fulenwiders, the Koelbels and the Zeppelins, and what they had to say about family real estate businesses and passing the torch to the next generation.