Some people peer in the windows of vacant retail space and see it as a hindrance. Others view it as an opportunity.
The question has crossed some residents’ minds: Why is new space being constructed downtown when ‘now leasing’ signs are scattered throughout Golden?
“I think it’s because developers are optimistic about the ability to find tenants and house them in Golden,” said Brad Haswell, an owner and tenant of 700 12th St.
Retail space varies from office and light industrial because they each have different markets, uses and rental prices.
Retail space located in central Jefferson County — West 72nd Avenue south to Alameda, west of Sheridan Boulevard — comprises 10.7 million square feet with a vacancy rate of 7.1 percent, according to data by CoStar Group Inc. The average rent costs $16.74 per square foot.
The net absorption, meaning how fast space is leasing, indicates a loss of 93,000 square feet.
In Golden, retail space comprises 1.2 million square feet at a 7.2 percent vacancy rate. The average rent costs $24 per square foot and the net absorption is a gain of 30,000 square feet.
“Vacancy in a market is an inherent thing,” said Fuller Real Estate vice president Esther Kettering.
Kettering believes a 7 percent vacancy rate is healthy. Below 5 percent, people will begin erecting new buildings and above 8 percent, new construction will slow down, even come to a halt. It is impossible to label a given vacancy rate ‘normal,’ Kettering said, since the rate is dictated by market behavior.
“Activity begets activity,” she said. “In Golden, there are a lot of historic buildings, and some available space on the market tenants won’t consider.”
Some older buildings might not be handicap accessible, or the cost to bring them up to code would be substantial, Haswell said.
Kettering was surprised to discover the average rent in Golden is about $7.25 higher than in central Jeffco. “The rent reflects the desirability of Golden,” she said.
Fuller Real Estate leases two new downtown developments, Jackson Court and the Gateway Station. At Jackson Court, 700 12th St., building owners Studio DH architecture occupies some of the second-floor offices, with one suite still available.
One tenant — the Urban Escape Day Spa — recently confirmed it will rent the middle bay on the first floor of retail space.
“Golden is a great community with a really vital downtown, and we felt it was a great place to locate a business,” said the spa’s owner, Robert Clark.
Haswell and partner James Dauer are waiting for the right tenants to fill the remaining retail space.
They’ve turned down three coffee companies to respect local businesses. They’d like to see an art gallery, bakery, outdoor-oriented store or something similar. The east bay is designed for a restaurant.
Golden’s market is unique, Kettering said, because of its overall demographics. College students, daytime employment and tourists aren’t figured into the census, causing national chains to look elsewhere.
“At the same time, it preserves some of the uniqueness of Golden,” Kettering said.
But some believe that the city’s distinctiveness should be upheld without further development.
“I feel Golden is trying to remake the town to look and feel like the undistinguishable amalgamation of America instead of using the inherent traits the city possesses to make us sparkle and stand out,” said resident Jen White.
“In my opinion, it’s going to turn downtown into a corridor without the fun and creative energy that sustains the warmth, engaging and enticing qualities of a place people want to be. It’s becoming another Breckenridge,” she said.
Paul Garton feels most cities build first, and then ask if there is a need.
“I think that Golden could afford to build more, because many of the buildings are old and businesses may not want to move into an older building. Though that is part of the draw of Golden, a throwback to the public,” Garton said. “I would think a retail business might want to be associated with the old-town look and feel of Golden.”
If a space is vacant for an extended period of time and not maintained, it can affect adjacent property values, said city Planning and Development Director Steve Glueck.
It also affects the city by loss of sales tax.
Building owners also are impacted.
“For every day that there’s not a tenant, there is a financial impact,” Haswell said.
“So the sooner the better, but we will not accept sooner if they don’t meet our qualifications.”
The Gateway Station will not begin commercial leasing until the summer, Kettering predicts.
“Retailers tend to be instant gratification,” she said. “Nothing is going to get done until it looks like a building.”
Healthy communities have turnover, Glueck said.
Kettering feels it gives businesses options, like goods in a store.
“We have been looking for a few years to move out of central Denver,” Dauer said of his architecture firm.
“That’s a trend I think others are following.”
In the outlying areas of the city, it takes longer to lease, Glueck said. The plaza north of town where Anytime Fitness and Alpenglow exist was vacant for about 12 months.
Restaurants on South Golden Road have come and gone. But while subleased space comprised 10 percent of available space in 2004, that percentage is virtually non-existent, according to the CoStar Group’s data.
“That indicates a healthy market,” Kettering said.
“And vacancy in the market is an inherent thing.”