Hobbyists and shoppers of all stripes — from rare book collectors to gun buyers, from gem aficionados to fishing enthusiasts — once flocked to the Denver Mart, a one-of-a-kind gathering space conveniently located off Interstate 25 and 58th Avenue in Adams County. Its replacement will maintain a high profile but less public face, although some showrooms open to the public might be part of the mix.
Westfield Company, the developer that acquired the Denver Mart out of bankruptcy, is about two weeks away from completing its demolition of the massive complex and has started actively marketing a light industrial project called Pivot Denver.
The sprawling 800,000-foot complex that drew tens of thousands of visitors a year will be replaced by four buildings containing 472,800 square feet of light industrial and commercial space. The reduced square footage reflects the absence of a second floor that the Denver Mart had, as well as parking to accommodate what will become more of a workplace and much less of a marketplace.
“The beautiful thing about these light industrial buildings is that they are blank slates,” said Matt Mitchell, a partner who oversees industrial projects at Westfield. ”I think we will see that showroom element here.”
Furniture Row is nearby and sales taxes are lower in unincorporated Adams County, so there is a good chance that vendors of building components or home furnishings might find their way into Pivot Denver. Mitchell said a high-tech research and development firm looking for laboratory and office space has reached out, and so have medical research companies unable to find anything along the U.S. 36 corridor.
If the weather cooperates and building materials arrive in time, a big “if” nowadays, the first building should be completed in August and the final one by October next year, he said.
Westfield is scheduled to go before the Adams County Board of County Commissioners on Oct. 25 for a decision on the Pivot Denver Metropolitan District, which will oversee the addition and replacement of infrastructure on the 30.4-acre site, said county spokesman William Porter.
Westfield initially created the district to handle the infrastructure for its Pecos Logistics Park, which includes 1.15 million square feet across 62.5 acres at Pecos Street and West 56th Avenue. Rather than saddle the project with an uncompetitive property tax rate after the local school district passed a successful bond measure, Westfield fronted the infrastructure costs itself.
But it has repurposed the district for Pivot Denver, with plans to issue about $9.3 million in bonds. A stormwater drainage system, which was lacking at the previous site, needs to be added. Aging water and sewer lines need to be replaced and the curb line along 58th Avenue will be redone and the setback from the street widened.
A nearby Comfort Inn Hotel is on a separate parcel and under separate ownership and isn’t part of the redevelopment. Nor is a Steak Escape/Taco John’s location along 58th Avenue, although Westfield has talked to the owner of that location about the possibility of building a larger restaurant.
Aging carpet, dated fixtures and a bumpy parking lot all spoke to the age and struggles of the Denver Mart, which came on the scene in 1965. It was a popular gathering place for years until online catalogs and e-commerce reduced the drawing power of in-person expos, tradeshows and wholesale markets.
The Denver Mart managed to hang on as a lower-cost alternative to the Colorado Convention Center or Gaylord Rockies for shows. The pandemic and limits on public gatherings, however, spelled the death knell for the struggling enterprise, which defaulted on its debt in March 2020. The doors closed to the public for good a year later.
Yet the prime location, near four major highways, not to mention a seemingly insatiable demand for industrial space in metro Denver, made the massive parcel a prime site for redevelopment. Westfield jumped in.
Dealing with asbestos and other hazards has slowed the project, and Westfield has spent about $9 million on abatement and demolition. Mitchell estimates the all-in costs will run closer to $100 million. The developer, which was behind the Mission Ballroom and the Stanley Marketplace, is also paying extra attention to architectural details given Pivot Denver’s visibility from Interstate 25.
It has also preserved some Denver Mart signage to provide recognition to what used to be a gathering place that holds memories for many longtime residents.
“Pivot Denver is located in what we could in an ‘ultra’ infill location for industrial,” said Jessica Ostermick, an industrial specialist and senior vice president with real estate brokerage CBRE in Denver.
As transportation costs have risen, companies are placing a premium on being closer to their customers and employees. Although the land for in-fill projects costs more and they command a higher rent, tenants are willing to pay up to be closer in, she said.
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“I can say that the Pivot Denver location will have broad appeal to a lot of industrial groups. It will be more distribution-focused than manufacturing-focused,” predicted Ostermick.
Developers have added nearly 10 million square feet of industrial space in the past year in metro Denver, with another 2.1 million square feet estimated to hit the market in the fourth quarter, according to Newmark.
“In terms of industrial product, central Denver continues to be the most coveted submarket in the Denver-metro area and where we’re seeing the highest rental rate appreciation. We expect well-located, Class A product in these infill locations to continue to do well and demand premium rents,” said Mike Wafer Jr., a managing director at Newmark who focuses on industrial and logistics services in the Denver market.
South Denver and Englewood represent another aging “central” market that could house newer industrial development. But the parcels are smaller and harder to assemble. For now, the action is on the north side of town when it comes to industrial infill projects, Ostermick said.
Mitchell said Pivot Denver is 100% speculative and that high-interest rates have turned the capital markets upside down. Concerns about a recession have only grown with each passing month. But Westfield secured its construction funding before things got crazy, he said. And Westfield was encouraged by the success it has had in leasing out the Pecos Logistics Park, including landing a large Pepsi warehouse.
“It is so hard, next to impossible, to find a site with critical mass, a 30-acres site that is so close in,” he said.
