CU Real Estate Forum: Amenities, flex space demand soars in post-COVID era

BOULDER — The COVID-19 pandemic and its aftermath didn’t crush the real estate market along the Boulder-Denver corridor, but they did alter the sector, creating new opportunities for investors, developers and other real estate professionals willing to embrace the evolving environment. 

Shifts in the way the region’s residents work, shop and play have rewarded players who embrace amenities-rich retail and entertainment projects and flex commercial space featuring offices, industrial and lab space.

These opportunities — along with the challenges and headwinds the industry has faced over the last three years — were topics of a panel discussion Wednesday at the University of Colorado Real Estate Center’s annual Real Estate Forum in Boulder. 

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With the rise of e-commerce, amplified by the pandemic, shopping center developers are finding success with “true live-work-play environments” that often feature shops, amenities and entertainment options, BMC Investments senior vice president Nikko Politis said.

The retail disruptions of the early part of the COVID-era provided an opportunity for developers, investors and government partners in districts such as Boulder’s Pearl Street Mall and Denver’s 16th Street Mall to “reimagine downtown,” said Sarah Wiebenson, Downtown Denver Partnership director of economic development.

That process isn’t always easy, given the region’s nagging issues with affordability and homelessness.

Denver’s Cherry Creek neighborhood is an example of a district successfully managing the safety concerns of its visitors, residents and business operators, Newmark executive managing director Jamie Gard said.

“People feel safe in Cherry Creek,” he said. “… Cherry Creek is boring, and that’s what’s fantastic about it.”

The success of the district is something of a double-edged sword — rents are rapidly rising, limiting access for smaller, independent businesses.

“All the things that people want — that costs money,” Gard said.

An important part of neighborhood success is a strong working relationship between the development community and local government staffers and officials, Pure Development managing partner Jose Carredano said.

“Developers rally around a masterplan,” he said, and master plans require buy-in from a variety of stakeholders.

The COVID-19 pandemic and the resulting rise in employees working from home has wreaked havoc on the office sector, but developers are overcoming that trend by combining office space with labs and manufacturing capacity.

“What’s become more important is getting people out of the house and into the office,” BioMed Realty vice president Mike Ruhl said. That’s less of a challenge for companies in the life-sciences and biotech sectors, which are BioMed’s bread and butter at Boulder’s Flatiron Park corporate campus.

BioMed, which bought the park last year, is in the process of redeveloping large swaths of the campus into biotech-centered spec buildings. 

Spec spaces have become more popular with companies in need of space in a hurry or without the capital to build their own flex sites. This is particularly true as venture capital investors have “slowed down and gotten more conservative about how they want to spend their money,” Ruhl said.