The vibrant city of Denver, known for its thriving small business community, is facing a challenging economic landscape. Despite low unemployment rates, rising inflation and the possibility of higher interest rates have created uncertainty for small business owners. Many are finding it increasingly difficult to make ends meet and pay their monthly rent. In this article, we will explore the struggles faced by Denver small businesses and the various strategies they are employing to navigate these challenging times.
The Impact of Rising Rents on Denver’s Small Businesses
One neighborhood in Denver that has been noticeably affected by rising rents is Bonnie Brae. The Saucy Noodle, an iconic Italian restaurant that had been serving the community for decades, was forced to close its doors due to the inability to afford the increased rent imposed by their new landlord, Otto Petty of Endurance Real Estate Partners. The closure of The Saucy Noodle serves as a stark reminder of the challenges faced by small businesses in Denver.
However, despite the closure of The Saucy Noodle, new businesses have emerged in the same location. Rugby Scott Ranch Provisions, a butcher shop, has opened its doors and will soon hold its grand opening. My Vision Nutrition, a health food restaurant, has also established itself in the neighborhood and has seen success in its first few months of operation.
The Cost of Rent for Small Businesses in Denver
Rent prices for retail spaces in Denver can vary significantly depending on the location. According to commercial real estate firm Cushman & Wakefield, the average retail rent in the city ranges from $20 to $50 per square foot annually. The average size of available retail space is around 7,000 square feet. This means that small business owners in Denver can expect to pay between $11,500 to $29,000 per month for a retail space of that size.
Comparatively, rent prices in other cities like San Diego and Las Vegas are significantly lower. In San Diego, retail spaces typically rent for $2 to $8 per square foot per month, while in Las Vegas, the range is $1 to $5 per square foot per month. Despite the relatively high rent prices in Denver, experts predict that they may continue to rise in the coming years due to population growth, a strong economy, and limited availability of retail spaces.
The Challenges Faced by Denver Small Business Owners
Denver small business owners not only have to contend with high rent prices but also with the uncertainty of the U.S. economy. While inflation has shown signs of softening, consumer prices and housing costs remain higher than they were in previous years. Additionally, business owners in Denver must also navigate other costs such as taxes and the city’s minimum wage requirements. The combination of these factors has created a challenging environment for small businesses in the Mile High City.
Lani Langton, a business advisor in Denver, describes the current situation as a “tough time” for small business owners due to the high costs involved. Many business leases are up for renewal, and landlords are seeking to increase rents or sell their buildings, putting additional pressure on small businesses. Some business owners have seen their rent double if they choose to stay in their current location. As a result, entrepreneurs are exploring alternative areas such as Aurora or Sheridan, where rent prices may be more affordable.
Stories of Resilience from New Denver Business Owners
Despite the challenges, there are still stories of resilience and success among Denver’s small business owners. Jacob Lemanski, the owner of Ant Life, an event venue near Coors Field, opened his business a little over a year ago. Lemanski, who transitioned from engineering to the art industry, initially started Ant Life as a gallery but quickly expanded to hosting events. While he has faced some setbacks and had to let go of his part-time employees, Lemanski remains optimistic about the future of his business.
Kara Admire, co-owner of KaraKara Blooms, a flower shop in Denver, also faced initial hurdles when starting her business. However, by focusing on servicing special events rather than daily arrangements, Admire was able to increase sales and pay her rent and bills. With plans for further growth, Admire is optimistic about the future of KaraKara Blooms.
The Struggles of Established Small Businesses in Denver
Nikki Hazamy, who runs a collective of businesses on Ogden Street in Capitol Hill, including The Corner Beet, Rooted Heart Yoga and Wellness, and Balanced Root Apothecary, has experienced significant challenges due to rising rent prices. Hazamy initially opened The Corner Beet in 2014 and later expanded to include the yoga studio and apothecary. However, the COVID-19 pandemic and increasing rent prices have made it difficult for Hazamy to sustain her businesses. She has had to make tough decisions such as raising prices and cutting staff in order to cover the high costs.
Barry Raphael, owner of Lumonics Light & Sound Gallery, has faced similar challenges. The gallery, which specializes in light art, has seen rising expenses, including rent, utilities, and insurance. Despite these hurdles, Lumonics has managed to establish itself over the past 15 years and has undertaken various projects to stay afloat.
Small businesses in Denver are grappling with the pressures of rising rent prices and an uncertain economic climate. Many are finding it challenging to keep up with the high costs of operating a business in the city. However, there are also stories of resilience and success, as entrepreneurs find innovative ways to navigate these challenges. While the road ahead may be tough, the determination and resourcefulness of Denver’s small business owners continue to drive them forward. As the city evolves, it is crucial to support these businesses and create an environment where they can thrive and contribute to the local economy.
See first source: The Denver Post
Featured Image Credit: Dan Burton; Unsplash – Thank you!