CREJ - Building Dialogue - March 2015
Young professionals, married couples and empty nesters – among many others – aren’t the only ones calling Denver’s brand- new apartment developments home. Unique and traditional retail and restaurant concepts are being welcomed into many of these impressive projects, bringing an added level of service and amenities to their residents and the surrounding community. As apartment development flourishes throughout the Denver metro area, many apartment developers have realized opportunities to fill their ground-floor space with retail concepts that will enhance their apartment building’s appeal, while serving the neighborhood around them. While downtown has seen the majority of such first-floor retail in apartment buildings (including the most recent plans for King Soopers at 20th Street and Chestnut Place, as well as Whole Foods at Union Station at the base of 17W), first-floor retailers will become an important component to high-density suburban projects, such as the Belleview Station apartment development in the Denver Tech Center. The reason for this infusion of retailers and restaurants into apartment building space is clear: market demand. People want to be able to stop in for coffee, drop off dry cleaning, sit down and dine, or pick up a quick dinner without having to go to extremes. And as Denver continues to grow, easily accessible shopping destinations will only grow in popularity. The key to success will be in researching and identifying the services and amenities that are in greatest demand, floor by floor (in the apartment buildings themselves) and block by block (in the surrounding neighborhood). With market demand a driving force, retail and restaurant owners have opportunity knocking at their door. Yet, even the most established brands as wells as fledgling entrepreneurs need to take care in identifying the best location for their new business venture. Likewise, apartment developers must find the right “retail mix” for the overall vision of their new residential communities. Location is still the critical factor. Both the retailer and developer must understand that the population of the apartment complex (even large complexes) provides a captive audience with increased frequency of visits; however, the complex alone may not result in adequate sales volume for the long term. Success is beckoning for these distinct business interests, as long as the right combination of building amenity and broader community support can be found. Some of the ways that retailers and apartment developers can discover a profitable partnership, and give people what they want, include: • Developers correctly determining the amenities that are best suited for the residents in their building as well as the residents and daytime population in the immediate trade area using a void analysis. • Developers need to be intentional in the development of their retail space. For example, if they wish to secure a restaurant, they need to incorporate a hood system, grease trap and outdoor seating area (if possible) into their development plan and budget. Other logistics, such as daily deliveries and trash removal, are critical to address before construction of the project even begins. • Developers also need to be intentional about the access and parking for retail customers. This is very critical to the success for retailers and restaurants, and parking is major determining factor when they decide whether or not to lease space. • First-floor retail also needs to consider the impact to the residence above. Such issues as hours of operation, restaurant odors, delivery times and outside customer traffic can be a negative more than a positive o the building’s amenities. • Developers need to be realistic about the visibility of their retail space to heavily trafficked streets and intersections. All things being equal, a retail space with inferior visibility to the main road or intersection will equate to a smaller rental rate and might not ever attract a strong business. Currently, almost every nondestination business would prefer to pay a premium for a superior location instead of receiving a discount for an inferior space. Denver’s new apartment buildings aren’t just providing new residences to people, but many are also bringing new – and needed – amenities and services to their residents and the surrounding community