Economic Pressures Impact Denver’s Small Businesses: Rent, Inflation, and Uncertainty

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Introduction

In the Mile High City, small businesses face mounting economic challenges, including escalating rent prices, persistent inflation, and an uncertain future. These factors are forcing business owners to make difficult decisions, including downsizing, adjusting operations, and even closing their doors.

The Bonnie Brae neighborhood exemplifies the impact of rising rents on local businesses. The iconic Saucy Noodle restaurant recently closed, a victim of unaffordable lease terms under a new landlord. Despite the emergence of new businesses in the Saucy Noodle’s former location, reminders linger of the past.

The Cost of Business

Denver’s retail rents range from $20 to $50 per square foot annually, with an average available space of around 7,000 square feet. This translates to monthly rent payments between $11,500 and $29,000.

In comparison, retail space in San Diego and Las Vegas is significantly lower, ranging from $2 to $8 per square foot per month and $1 to $5 per square foot per month, respectively. However, Cushman & Wakefield predicts that Denver’s retail space rents will continue to rise due to population growth, economic strength, and limited supply.

Besides rising rents, Denver business owners are also grappling with economic uncertainty. Inflation is easing but remains higher than last year.

Business Decisions in the Face of Adversity

Business advisor Lani Langton highlights the difficulties facing business owners due to soaring costs. Many are experiencing rent increases of up to 100% upon lease renewal.

As a result, she observes an “exodus” of businesses from downtown to more affordable areas like Aurora, Sheridan, and Parker.

New Business Owners Navigate Challenges

Jacob Lemanski, the owner of Ant Life event venue, discusses the challenges of starting a business in the current economic climate. The gallery-turned-venue generates an average of $1,500 per event but faces high monthly rent of $10,000.

He expresses optimism but acknowledges the financial strain, particularly during slower business periods.

Challenging Times for Established Businesses

Nikki Hazamy, who runs several businesses on Ogden Street in Capitol Hill, has encountered financial difficulties due to high rent and other expenses. Her vegetarian restaurant, The Corner Beet, has implemented tipping and increased yoga class prices to mitigate the financial burden.

She fears that further cuts to staff and operations may be necessary, as the cost of goods at the restaurant continues to rise.

Innovation and Adaptation

Barry Raphael, of Lumonics Light & Sound Gallery, has faced numerous challenges over the years, including the financial crisis of 2008 and the COVID-19 pandemic. Despite these obstacles, the gallery has remained afloat through innovative projects.

Raphael emphasizes the importance of adaptability and staying open to new possibilities. The gallery’s diversified offerings include art galleries, a studio, a performance space, and a school of light art.

The passing of the gallery’s founders has presented new challenges, but Raphael remains optimistic about the future.

Conclusion

Small businesses in Denver are navigating a challenging economic landscape. Escalating rents, inflation, and uncertainty are forcing owners to make difficult decisions. Despite these obstacles, innovation and adaptability are key to survival. The city remains a hub for entrepreneurs and businesses, and with careful planning and support, it can continue to thrive amidst the economic headwinds.

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