You Don’t Have To Go Home, But You Can’t Stay Here: Denver’s Breweries Succumbing To Their Own Success

Breweries were Denver’s economic alchemists for more than a decade, leading the evolution of neglected and forgotten Denver neighborhoods into destinations. Lower Downtown, Tennyson, the River North Art District and parts of South Broadway all owe much of their revival to craft beer. 

But now, the same forces breweries helped set in motion — soaring property values, rising rents and shifting demographics — are forcing them out.

“The rapid pace of development and new buildings going up is kind of insane,” River North Brewery owner Matt Hess told Bisnow. “Along with all of that development, prices go up, rents go up, and that is going to come with a change in the people in the neighborhood.”

Nine breweries or taprooms shut down in Denver proper in 2024. Across Colorado, 39 closed while only 32 opened. Compare that to the 2010s, when breweries were opening at a breathless pace: Colorado’s brewery count skyrocketed from about 100 in 2010 to 420 by 2022, according to Colorado Brewery List, which tracks the industry.

The cycle has flipped. And it is breweries that are feeling the squeeze.

A 2024 study focused on Denver and published in the journal Growth and Change found that breweries have historically boosted residential property values by as much as 20%, particularly in city neighborhoods. The trend was so strong that some cities leaned into brewery-led redevelopment as a strategy.

While breweries helped boost residential property values, their early presence didn’t significantly drive up commercial property values, according to a 2019 study of Charlotte’s brewery scene that shares an author with the 2024 report. 

But in Denver, redevelopment accelerated, demand grew and commercial landlords eventually saw the kind of value appreciation breweries never directly benefited from. 

Chris Bell, the owner of Tennyson Street's Call to Arms Brewing Co., which opened in 2015, has watched these shifts happen in real time.

“Tennyson went from a place with a lot of going-out culture to a staying-in culture,” Bell told Bisnow.

A real estate boom changed the neighborhood, he said. Developers knocked down old bungalows, replacing them with high-density housing that lacked ground-floor retail. More people moved in, but they weren’t necessarily walking to the local taproom.

At the same time, even commercial property values skyrocketed. Bell estimates that the building his brewery operates in has quintupled in value since he moved in. Taxes, rent and insurance have soared with it.

“If I didn’t have [a rent] escalator locked in, there would be no point in staying open,” Bell said.

In RiNo, Hess has seen the same pattern. His brewery has two taprooms in the Five Points neighborhood and RiNo district.

Left behind are empty ground-floor retail spaces. Hess said there is no shortage of vacancies in RiNo. But landlords are still asking premium prices.

Retail saw net negative absorption of 114K SF in the Denver metro in the fourth quarter. Yet average retail rents in Denver climbed to $20.56 per SF, with some areas pushing $30, according to CBRE’s fourth-quarter retail report.

Strip center-style retail saw 5K SF of positive absorption during the same period. Lifestyle retail, defined by CBRE as high-end chain stores featuring food and entertainment with an outdoor element, along with malls posted negative net absorption of 54K SF. These categories combined have 82K SF of available inventory.

The glut of empty retail space is something the district is wrestling with full time, according to Alye Sharp, RiNo Art District executive director of programs and partnerships.

“We pushed developers to include ground-floor retail, and now they’re sitting empty,” Sharp said, echoing comments from River North Brewery’s Hess. “It’s a no-win situation.” 

She added that many creatives and potential business owners who used to call the district home are moving to more affordable cities like Kansas City, Missouri, and Buffalo, New York.

Breweries face another challenge: Americans are drinking less, especially the younger generations. Gallup data shows alcohol consumption among adults 18 to 34 has fallen from 72% to 62% over two decades. Generation Z drinks 20% less than their millennial predecessors, according to a widely cited Berenberg Research study, reflecting a broader health-conscious movement.

For breweries, that means competing for a smaller audience that has more choices than ever.

There was a sort of “build it and they will come” vibe when Call to Arms opened, Bell said. Now, his brewery has poured resources into immersive events and influencer marketing just to maintain traction.

Hess has shifted his model to focus on small-batch, exclusive releases — a strategy that keeps customers engaged but is a far cry from the volume growth strategies of the past.

Breweries, for now, are getting creative. Some are going smaller, focusing on taprooms with lower overhead. Others are pushing distribution models to survive. But many are simply closing.

A decade ago, they were the pioneers. Now, in some of the very neighborhoods they helped transform, it’s last call.