The COVID-19 pandemic turned Downtown Denver from the place to be to a place to flee, derailing two decades of momentum overnight. Five years later, downtown’s recovery continues to lag behind most other cities, and the delay is costing Denver and the region.
“We can wait 10 or 15 years and the market will correct. It historically always has,” said Kourtny Garrett, president and CEO of the Downtown Denver Partnership. “But what will we lose in the meantime?”
Tens of millions in tax revenues are no longer collected each year. Large office towers that cost billions to build and maintain sit mostly empty, a wasted resource decaying over time. Denver’s reputation as a vibrant city is dimming, making it harder to attract businesses, tourists and residents from other places.
READ THE FULL PROJECT: At a crossroads: Downtown Denver is waiting for its rebound
Downtown covers just 1.8% of Denver’s land area, but is home to three in 10 of its jobs, 4.6% of its population and a fifth of its taxable property value, according to the Partnership. Before the pandemic, it accounted for 13% of the city’s property and sales tax revenues. Today, that share is closer to 8%, representing $45 million a year in lost revenue.
What happens to downtown matters for the city, state and region.
Density fell out of favor during the pandemic, as people sought less crowded living arrangements. Employers shifted to remote work, reducing the need for office space. Social unrest and rising crime boosted perceptions that central business districts should be avoided.
No downtown has found a fail-proof answer to the larger trends the pandemic unleashed, Garrett said.
Time alone hasn’t healed the deep pandemic wounding, the federal government won’t ride to the rescue as it has before, and no magic wand can be waved to return workers to their cubicles, circa 2019.
A renewed sense of urgency has emerged under the administration of Denver Mayor Mike Johnston, among city planners, and civic and business groups such as the Partnership and Visit Denver.
“We’ve been through this before. We need to get the old Denver way back, which is having a chip on our shoulder,” Bill Mosher, Denver’s Chief Projects Officer, told a crowd gathered for the Partnership’s “State of Downtown” breakfast in April.
Denver last decade was “like a little darling child” that the rest of the country allowed to ride a “gravy train” coming out of the Great Recession, he said. Everyone thought Denver was cool, but the free ride that popularity provided is over. Denver needs to stop being so precious and call on the scrappy brawler that allowed it to survive past crises, he continued.
“Guess what? We’re still cool. And guess what — we can do better, but nobody’s going to help us. We have to help ourselves. So I need all of you to get engaged,” Mosher urged the crowd in a bootstrap call to action.
Mosher spearheaded the revival of the Union Station neighborhood, now an oasis of strength within a larger distress zone. Johnston recruited him late last year to oversee urban development projects for the city and to supervise the Downtown Development Authority, a widened version of the taxing district that helped finance Union Station’s restoration.
Voters in November overwhelmingly approved expanding the authority’s territory to cover most of downtown and funnel an estimated $570 million towards renewal efforts, from funding attractions and activities, improving infrastructure and green spaces, and converting tired buildings to new uses.
Public funds could be leveraged three to four times against private investments, Garrett said, bringing billions of dollars to bear.
A roadmap for that spending and other priorities will be contained in a revamped Downtown Area Plan, which is focused on improving transit, refreshing public spaces like Civic Center and Skyline parks, and attracting new businesses.
There is a plan, there is a pot of money, and Mosher said courage and creativity need to replace paralysis and negativity so downtown can get back on its feet and move forward.
Defining the distress
Downtown streets have tended to carry about a fifth less foot traffic than they did prior to the pandemic, although that gap improved to 15% less traffic last month, according to statistics gathered by the Partnership.
Placer.ai, which tracks cell phone traffic, estimates that Downtown Denver office-related visits in March remain 42% below where they were in March 2019. Things are improving, but Denver’s increase over the past year was among the weakest of the larger cities studied.
When the architectural firm Gensler surveyed downtown visitors last fall, 55% described having a “great” experience, compared to 2021 and 2023, when 70% used that term. People’s perceptions are worsening, not improving, reflecting both safety concerns and the disruptive renovation of 16th Street.
Originally slated to run two years, remodeling the 13 original blocks of 16th Street will take more than three years, and the heavy construction has crushed a long list of retailers along the corridor.
Completion of 16th Street, set for late fall, is considered key to attracting new retailers and more visitors, especially when coupled with improvements in public safety. Unless people feel safe, other efforts to improve downtown will be stifled.
Above the quieter streets, another big problem is hidden — lots of empty office space. Denver had the fifth biggest percentage increase in its downtown office vacancy rate since the end of 2019 out of 78 cities that Moody’s examined in November 2024. Only San Francisco, San Antonio, Austin, and Raleigh fared worse.
CBRE puts the total vacancy rate for downtown offices in the first quarter at 35.3%, up from 34.9% in the fourth quarter of 2024 and 34.2% in the third quarter. Add in space marketed by current tenants looking to sublease, and closer to 40% of Downtown Denver’s office space is available, estimates the London-based real estate firm Savills.
Vacancy rates are starting to retreat in places like Manhattan, Houston and San Jose, but they continue to rise in Denver, reaching levels not seen since the oil and gas bust of the mid-1980s.
The 1980s downturn was an economic disruption so severe that the region set new records for bankruptcies and foreclosures. Colorado even lost population one year, recalled former Denver Mayor Federico Peña.
His recovery strategy focused on everything — revitalizing downtown and the city’s neighborhoods, preserving historic buildings, cleaning up parks, reducing air pollution, curbing crime and bringing in Major League baseball. The odds stacked against it, Denver even pursued a new airport.
“When you have a community whose back is against the wall, everybody comes together,” he said.
This time, a bad economy and large-scale layoffs aren’t driving downtown’s struggles. To the degree the larger community doesn’t perceive a wider problem, it is harder to rally support and easier to wait for the recovery to take hold on its own.
Downtown’s office vacancy rate is nearly four times above the low of just over 9% reached in 2017, per CBRE’s numbers. And it rose sharply despite downtown employment counts that are 30% higher than last decade.
“Denver presents a stark market paradox: office-using employment remains robust — with more than 35,000 white-collar positions added since early 2020 and employment levels holding just below the mid-2022 peak — yet the physical office market continues to deteriorate,” said TJ Jaroszewski, director of Mountain Region Research with the real estate brokerage JLL in a research note.
On the plus side, restaurant and retail sales are above pre-pandemic levels. The Denver Center for the Performing Arts continues to draw big crowds. The seasons and playoff runs of the Denver Nuggets and the Colorado Avalanche, while cut short of a championship, boosted downtown visits. Hotel occupancy is around 69%, within reach of the 79% rate seen in 2019, and average room rates are higher.
Convention visits averaged 891,000 a year last decade, before the pandemic took them down to 226,126. Last year, 740,000 attendees made it downtown, said Richard Scharf, president and CEO of Visit Denver, the Convention and Visitors Bureau.
“This will be one of our best convention years ever,” Scharf said of 2025. “People are coming in and they’re spending money in our economy, and then they leave. I mean, what a great way. Come in, spend your money, and then it ripples into the economy.”
Downtown Denver should regain its momentum, eventually. But it is underperforming during an otherwise good economic stretch, supported by billions of dollars in federal stimulus and low interest rates coming out of the pandemic.
The U.S. economy shrank in the first quarter. Trade wars are weighing on the global economy. Business and consumer confidence are tumbling. Colorado’s job growth is already among the weakest in the country. The conversation in the months ahead could become less about remote work and more about no work.
What if downtown has missed its bus, lost the train, and is about to be left waiting at the station, stuck at the crossroads?
Cracks in the foundation
Downtown is sometimes viewed as one big monolith, but it consists of several districts. Of those, Upper Downtown and Skyline Park are facing the greatest distress, followed by the Ball Park and Arapahoe Square area.
Unlike the Golden Triangle, LoDo and Union Station, which have a better balance of different uses, Upper Downtown is primarily office and increasingly a kind of office that is out of favor with tenants. The biggest structural problem downtown has to overcome is one of overconcentration.
Half of the space contained in downtown’s largest office buildings, defined as those with 100,000 square feet or more, was built in a narrow 10-year window from 1977 to 1986 during the oil and gas boom. A quarter came together in the prior nine decades and another quarter in the past 25 years, according to a Denver Post analysis.
“I think a lot of tenants are realizing that to get employees back to the office or incentivize that office culture, they want to be in an improved building. And there’s also an improved location mindset too,” Sarajane Goodfellow, First Vice President at CBRE Denver.
Lincoln Street represents downtown’s eastern boundary, but Goodfellow said Arapahoe Street represents the current dividing lines for what tenants and brokers perceive as desirable office space. Newer buildings to the west are more stable and marketable, while unimproved buildings to the east are struggling and emptying.
“That was really where this, like invisible delineation line, was made,” she said of Arapahoe Street.
About three-quarters of the office space in Upper Downtown and Skyline Park is still categorized as “Class A” or top tier, but the market doesn’t view it that way.
“You have an aging product that needs a ton of investment. You have capital providers who aren’t willing to put money into space without the tenants. Tenants might get cheaper rent in these buildings, but they will have to put out a lot of capital to make space usable,” said Michael Kaplan, a partner in the real estate group at the Denver office of the law firm WilmerHale.
Tenants tell her if they could afford it, they would prefer to be in brand new buildings in Union Station, in LoDo, or in an ’80s vintage with improvements, Goodfellow said. Consolidation remains a dominant theme in 2025, according to CBRE. Tenants are trading up to higher-quality spaces and reducing the square footage they lease.
Even though downtown has a lot of surplus space, advertised rents in the first quarter averaged $41.57 a square foot, nearly 40% higher than the $29.62 a square foot averaged in the suburbs, according to CBRE. Downtown rents are essentially unchanged since 2021, despite extreme oversupply.
Downtown’s real estate market hasn’t found the equivalent of the half-off rack for expiring baked goods that grocery stores roll out. That has allowed the inventory in Upper Downtown to get so stale that entire buildings eventually find themselves in a metaphorical trash bin.
Upper Downtown’s predicament traces back to an era when abundant petroleum dollars hooked up with loose lending practices at savings and loans and decided to start a family. At one point, more than 30 towers were rising at the same time, recalled Doug Tisdale, a member of the DDA board and former RTD chairman, during a public meeting hosted by the authority.
The misbegotten union gave birth to the titan towers of Upper Downtown. Welcomed at first as a replacement for scraped blocks and parking lots, the attitude over time shifted to tolerance. Now, the fear is that their decline could devour downtown’s future if not handled properly.
When Exxon decided to abandon the Colony Oil Shale Project in northwestern Colorado on May 2, 1982, the reverberations of “Black Sunday” reached deep into downtown. But it wasn’t until 1986, when a global oil glut pushed prices from $27 a barrel to under $10, that the boom ended and downtown suffered a knockout punch. After 1290 Broadway opened in 1986, downtown wouldn’t see another big office tower rise for 14 years.
Energy companies folded or left for Dallas and Houston, shedding thousands of jobs and leaving behind “see-through” towers. Trying to create an illusion of occupancy, owners often left them brightly lit at night, which only further exposed floor upon floor with no people, no desks, and a dark future. Downtown building values plummeted, as they are doing now.
Denver’s undiversified economy, too heavily dependent on natural resources, reeled. To speed up a recovery, the city invested heavily in public projects, while economic developers preached a message of diversification and cooperation. The federal government cleaned up the bad S&L loans and sold troubled real estate to new owners through the Resolution Trust Corp.
The RTC’s Denver regional office set up base in the Park Central complex, where the Downtown Denver Partnership resides. Troubled back then, and troubled now, the half-empty collection of three buildings sold in March for an undisclosed price.
Denver and Colorado found a way to a more diversified economy, joining in a tech and telecom boom that brought renewed prosperity in the late 1990s. Fortunately for downtown, the petroleum towers were still young and attractive enough to draw tenants.
Memories of the turbulent era eventually faded. The towers remained, standing guard over a boom and bust commemorative plaque on a sidewalk at 17th and California streets.
Tenants are on the move
For decades, downtown’s biggest rival in the battle for tenants was the Denver Tech Center. But more leases are draining, like the runoff, toward the South Platte River, with a few finding their way down to Cherry Creek, which has become one of the country’s most vibrant office and residential districts this decade.
Antero Resources in 2014 showed a keen sense for where Denver’s commercial real estate market was headed when it moved into new office space next to Union Station. A decade later, its bet is on Cherry Creek and a new building called The Henry at 201 Fillmore St.
The River North Art District is also luring tenants from downtown. Denver-based law firm Davis Graham & Stubbs camped out in Republic Plaza, built in 1982, for years. The tower at 370 17th St. carried the prestige of being Denver’s tallest skyscraper. At the turn of the century, the law firm moved west into the Millennium Financial Center at 1550 17th St., aptly named given the year it opened.
But even Y2K feels like ancient history. In December, the firm became the anchor tenant in the newly constructed Paradigm River North at 3400 Walnut St., an eight-story office building in RiNo. Xcel Energy plans to leave 1800 Larimer, built in 2009, this June for T3 RiNo, a new six-story mass timber building, also in RiNo.
Even the tenants staying downtown find themselves pulled westward when leases renew. Gibson, Dunn & Crutcher, an L.A.-based law firm active in Denver for more than four decades, left its longtime offices at 1801 California St., built in 1982, for 1900 Lawrence St., which opened up with 700,000 square feet in 31 stories in September.
Building Denver’s largest skyscraper in four decades seemed like the height of folly when Chicago developer Riverside Investment & Development Co. broke ground in April 2022 on the site of a former parking lot.
But the company’s CEO defended the investment, saying that even if businesses needed less office space, they would require higher-quality space with the kind of amenities alluring enough to convince home-bound employees to commute in.
1900 Lawrence has a golf simulator, rooftop lounge, fitness center, and a spa area where frazzled employees can book massage therapists. The tower has taken office amenities to an unprecedented level in Denver, making it harder for older buildings to keep pace, said Greg Bante, an executive managing director at Savills Denver.
Old for new is a constant theme in tenant moves. JPMorgan Chase & Co., the nation’s largest bank, left the Chase Tower at 1125 17th St. in 2022 for the new Market Station on the former site of RTD’s Market Street Station. It traded space in a 1980 building for one built in 2021.
“Downtown Denver is a vibrant and dynamic community that continues to be a key hub for innovation and growth. We’re here for the long run, and we’re dedicated to investing in the local economy and supporting the talented workforce that calls Denver home,” said Britt Urband, managing director for J.P. Morgan Private Bank, and Kevin Lander, region manager for Commercial Banking, in a joint statement.
Fast-growing tech company Ibotta, which went public last year, has committed to a long-term presence in Denver by signing a multi-year lease for 85,000 square feet of office space in the eight-story 16 Market Square building — built in 2001 at 1400 16th St.
Ibotta plans to leave 1801 California St., built in 1980, by the end of this year. The redesigned space should accommodate more than 500 employees who commute downtown to work three days per week, per Ibotta’s “Denver-first” hybrid work policy.
“We’re proud to have signed a 10-year lease in a moment where the city really needs us, where only a third of the occupancy is there,” said Ibotta’s founder and CEO Bryan Leach. “I never considered leaving downtown. It is important to have the downtown area of your community be a thriving place where people live and work.”
Leach said he didn’t want to see Denver repeat a problem he witnessed in Atlanta. Businesses fled the city’s downtown for more affluent business districts on the periphery. As the core hollowed out, it left behind low-income, high-crime areas.
“You don’t want that. So, I don’t want to be part of the problem. I want to be part of the solution,” Leach said.
Boardrooms to bedrooms
Downtown Denver and other urban cores risk entering a difficult-to-reverse “doom loop” once their largest buildings empty out, and preventing that spiral has added to the sense of urgency.
As rent revenues fall, loan defaults become more likely, causing distressed sales to rise and pushing down property values for nearby buildings. Falling property values make it harder for building owners to justify making the improvements needed to stay competitive.
Tax revenues decline, leaving cities with less money to maintain expensive infrastructure, secure public safety and provide needed services. Businesses and visitors stay away and residents move out. The doom loop picks up momentum.
The shift to remote work exposed how over-reliant downtowns had become on office space. Downtown real estate in the U.S. is 70% office-based or “work” focused, about 16% residential or “live” and 14% recreational or “play,” according to a report from Cushman & Wakefield last year called “Reimagining Cities: Disrupting the Urban Doom Loop.”
Achieving a more balanced mix is the chief way to disrupt the doom loop within “Walkable Urban Areas.” A good target is 31% living space, 42% office space and 26% play space, according to the analysis.
Downtowns, Denver’s included, are especially prone to being all work and no play. They need to find a way to live a little more, with a focus on for-sale versus for-rent living spaces.
“We continue to lead with this vision of a complete neighborhood, diversified use, the neighborhood-scale feel, high levels of amenity services,” Garrett said. “You can walk out of your condo, take your child to day care, walk to work, stop by the dry cleaner, pick up your child on the way home, maybe pick up a bag of groceries.”
Compared to older cities, Downtown Denver is home to a smaller share of the city’s overall population, Garrett said. About 33,000 people live downtown, and they are slightly younger, more educated, higher earning and less racially diverse than the city overall. But they must put up with wide gaps in services taken for granted in other neighborhoods.
Union Station, Lower Downtown and the Central Platte Valley have been more intentional about creating more balance. The Golden Triangle area is seeing an influx of residential development and the Auraria Campus is adding more residential and mixed-use retail.
But how do Upper Downtown and Skyline Park, with their bigger buildings, integrate more “live” and “play” into the mix?
Fire sales, which are accelerating, are a necessary step for any transformation, brokers argue. A low purchase price combined with public support can incentivize investors to deploy the hundreds of millions of dollars needed to give buildings a new lease on life.
But it isn’t clear yet what kind of repurposing will pay off financially. Discussions of vertical greenhouses raising fresh produce for nearby restaurants and residents haven’t gained traction. Returning light manufacturing to central Denver is probably a non-starter.
Schools would make downtown a more complete neighborhood — wouldn’t it be cool to ride the elevator one floor up to the next grade? But Denver Public Schools is closing schools, not opening them.
As cloud-based software and artificial intelligence take on more tasks, computer servers are starting to occupy more office floors once filled with people. CoreSite, which operates data centers, recently purchased the DE1 data center at the Denver Gas and Electric Building and operates another one at 639 E. 18th Ave.
Computers don’t care about outdated paint and worn carpeting or the friendliness of the barista in the lobby. Just make sure the HVAC systems keep the temperatures right and electricity flows smoothly day and night.
Some owners are investing heavily to keep older towers competitive. But doubling down on “work” uses doesn’t resolve the overconcentration that Cushman & Wakefield argues urban cores need to move away from. If more residents are needed, older office buildings should be converted to apartments and condos.
But there is a heated debate on whether residential conversions are financially feasible, especially for the larger office towers from the late ’70s and ’80s. Extending water and sewer lines from the central core to the outer edges of buildings is costly. Large floor plates result in large areas of difficult-to-rent windowless space.
Up for Growth, a housing advocacy group, estimated a couple of years ago that only five out of 206 multi-story buildings, or 2.5% of the total in central Denver, could transition to residential at a reasonable cost.
Gensler, the architectural firm, and the city of Denver in 2023 came up with a list of 16 downtown buildings where a conversion should work, with another 13 that might work. Those towers could add 5,000 new apartments or condos to the downtown area and repurpose 4.3 million square feet of underused office space.
Residential conversions seem to be a better solution for downtown’s oldest buildings, not its most abundant ones — places like the Petroleum Building, built in 1956, and the University Building, built in 1910. Bonus points for anything with a rectangular design, lots of natural interior light and distinctive architectural features.
Market appetite is another consideration. Downtown has around 8% of all the apartments in metro Denver, about 21,521 units, and has claimed a disproportionate share of new multi-family construction in recent years, according to the Apartment Association of Metro Denver.
Landlords are now struggling to get those new units filled, as shown by an 8% vacancy rate downtown. Rent decreases are accelerating, which could make investors and lenders fearful that conversions won’t generate the returns required, at least in the near term.
Downtown needs more for-sale condos, but construction defects litigation and high insurance premiums in Colorado have kept developers away.
Amacon, a Canadian developer, is defying the odds and building two tall condo towers with 461 units at 1917 Broadway and 525 18th St., testing the appetite for home ownership in Upper Downtown with units starting at $365,000.
“A large portion of people who are buying are already living downtown, either renting or living in older buildings or looking for more amenities,” said Stephanie Babineau, a vice president of marketing and sales for Amacon, in an email. “Maintenance fees for older buildings are continuing to go up, so buyers are looking for new construction where maintenance fees are lower.”
Upton Residences represents the kind of large-scale residential that can meld with the large-scale office towers, bringing a Vancouver model to Denver. Amacon plans to add two more 39-story condo towers nearby, one at 1800 Welton St. and another at 1925 N. Broadway, contributing another 600 for-sale condos. The second project will include a hotel, ground-floor retail and parking.
Depending on the reception Amacon receives, building residential towers from scratch could prove more economical than conversions. But Denver officials, fearful of repeating past mistakes from the urban renewal era, are loath to tear down the titans.
Johnston said he would consider demolition in extreme cases, but only as a “last resort” because of the high expense, disruptions to the surrounding area and climate impacts. Taking down skyscrapers would also alter the city’s skyline. But Denver may be left with no good alternatives if buildings become blighted and can’t be repurposed.
Kaplan said a significant number of commercial real estate loans in Denver are coming due next year. Republic Plaza’s owners defaulted and reworked their loan in March 2023. That loan is coming due again in July, but borrowing costs are more expensive now and the vacancy rate is a difficult 36.7%.
Investors who stepped up early in the pandemic, trying to leverage low interest rates to pick up properties at a discount and ride out a “temporary” dip in demand, are among those under the greatest financial stress, Kaplan said.
Looking further ahead, redevelopment around Ball Arena and of Elitch Gardens could push future downtown investments southward down the Platte River, leaving Upper Downtown without a compelling story, Kaplan said.
Downtown truly is at a crossroads, and things could go either way.
“I am optimistic that Denver as a whole will continue to grow and bring new opportunities to its residents. What I don’t know is whether there is a path forward for the older part of downtown to re-energize,” Kaplan said. “I am optimistic that with some creative thinking, the area can re-energize. Where I get less optimistic — I haven’t seen a ton of creative thinking yet.”
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Originally Published: May 29, 2025 at 6:00 AM MDT
