real estate

Signage points to the availability of an apartment off Hopkins Avenue in Aspen.

Given that retail operations in Pitkin County are limited to 50% due to COVID-19 restrictions, opening a business in Aspen right now might seem like a risky proposition.

But that hasn't stopped a wave of retailers from moving into the market. In fact, a business looking to open a storefront in downtown Aspen now would find their options limited to almost none, according to local brokers.

These businesses are following a migration of residents from metropolitan cities to resort towns. The valley has experienced staggering real estate activity this year, and Pitkin County ended 2019 with $2.3 billion in real estate transactions. Inventory is low, and sales prices are high. 

“Obviously the big news is residential, which is over the top,” said Karen Setterfield, president of Setterfield & Bright. “But it’s spilling over into the commercial market as well.” 

Her company brokered 18 retail leases in 2020, almost double the figure during its best year previously. Of those 18, only five are considered to be “pop-ups” whose lease terms are less than a year. While pop-ups have been popular in downtown Aspen in recent years, the longer-term leases demonstrate hope in the market, Setterfield said. 

“People are actually going shopping here, and that’s not happening in most other locations right now,” she said. “The luxury markets are doing better than other retail. Because online shopping is so prevalent, if you want something from a department store, you can buy it online. But boutique and luxury retail is that type of thing where you want to touch the fabric and experience it directly.” 

Sales tax reports from Aspen’s finance department show that once retail restarted following a complete spring shutdown, it got off to a rollercoaster start this summer. In June, luxury goods were up 18.8% in sales over the same month in 2019, but clothing itself was down 25.7%. In July, luxury goods were down 19.9%, and then increased to 44.4% in August and 43.7% in September. 

In October, the city implemented a new sales-tax software system, so direct comparisons in year-to-year tracking won't be available for 12 months. Sales tax information for November and December has not been released yet. 

Still, the numbers show that retail is having a good year. In fact, by September, retail sales as a whole in Aspen were up 40.9% relative to the same period in 2019. And that’s pre-holiday shopping, Finance Director Pete Strecker noted. 

Laurie O’Connell, who opened Perch in early December, is one of the entrepreneurs who saw Aspen as an opportunity. Her boutique already had locations in Denver and Vail.

“I knew Aspen in my early 20s, from living there after college for a ski season,” O’Connell said. “I was seeing what was happening during the pandemic and decided to take advantage of a market that is so attractive to clients from all over the world.”

Being a Vail resident, she understands the nuances and appeal of resort markets.

“What better opportunity than Aspen?” O’Connell said, noting that her commercial neighbors are now Gucci, Dior and Max.

“I’m really among the best of the best and I’m very proud of that,” she said. 

But, O’Connell said it’s not a one-way relationship. She also signed a long-term lease and is looking forward to creating partnerships within the community among the nonprofits and her neighbors. 

Among the additional retailers moving into the market, there are both international brands, such as Chrome Hearts, Golden Goose and Giorgio Armani’s pop-up, and then owner-occupied businesses opened by people who have recently moved to the valley, such as Atlas Fine, Wyld Blue and Angels and Outlaws. 

“We had always been looking for a second location to find a reverse season,” said Sasha Benz, who owns Wyld Blue, which started in the Hamptons in 2017. “Aspen was always on the road map. …I visited this summer when I was eight months pregnant, spent about 12 hours here, had a great broker, saw the space and thought, ‘This is it.’”

She opened Wyld Blue in early December. 

“A lot of people were saying, ‘It’s crazy, nobody is doing this, nobody is expanding,’” Benz said. “And Aspen is a different town.” 

For both O’Connell and Benz, whose businesses have only been open locally one month, it’s too soon to tell if the move was the right one. But they’re both optimistic and pointed out the warm welcome they’ve received. 

“Any retail company knows they’re dead if they’re depending on downtown New York, or more densely populated areas,” said Lex Tarumianz, a broker with Aspen Snowmass Sotheby’s. “Retailers are seeing the flight of consumers who are looking for Palm Beach, the Hamptons or Aspen. It’s these resort locations where they can make some sales.”

The new residents to the valley have enormous spending power, he said. In 2020, the average price of a single-family home reached $10.8 million by the end of November, according to a report released by local broker Andrew Ernemmann. 

“It’s more clear now than ever that we’re a safe haven for the ultra-wealthy,” Tarumianz said. “They keep people employed, and everything stems from that, whether it’s the RETT (real estate transfer tax), restaurants or retail. The high-end Aspen consumer drives a lot of our economy here. It’s going to continue to be that way.”