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Brik on York is one of the many Denver restaurants that has closed recently

Is the Denver Restaurant Bubble Bursting?

In the wake of recent closings—Telegraph, DJ’s, Über Eats, Brik on York—are we finally seeing a slowdown?

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Do the recent closings of small operators such as Telegraph, DJ’s Cafe, Über Eats, and Brik on York indicate that Denver’s restaurant market is cooling off? Not so fast, says restaurant consultant John Imbergamo of the Imbergamo Group. “The definition of a restaurant recession is when places close and the spaces that they were in remain empty. While we’ve seen a few of those spaces stay empty, most of them get snapped up almost immediately and redone into a new restaurant.”

This is true even when rents are high. Take Über Eats in LoHi, which closed two weeks ago. A new tenant is already lined up to take over the space (although the name and concept haven’t yet been announced). In fact, the impetus behind the closure came from the forthcoming restaurant itself, which approached—for the second time—Über Eats co-owner Alex Gschwend and his partners about assuming the location. “It was the right time to move on,” Gschwend says, explaining that the shuttering came as a result of three things: Über Eats’ five-year lease was running out, rent was skyrocketing, and “the neighborhood has become more sit-down and fine-dining as opposed to what we were, which was fast casual,” he says. Gschwend is quick to say that the Über Sausage in Congress Park is going strong and that he and his partners will announce a new, larger-format project in partnership with a brewery in early 2018.

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Chef-restaurateur Lon Symensma, who last week publicized he’s opening LeRoux and Kaya next door to his seven-year-old ChoLon, feels the local restaurant industry is getting stronger by the day. “When you look at the business, you have to evaluate the clientele,” he says. “[Denver is] in a great spot and the economy is doing well. People aren’t moving here from nearby states like Nebraska and Kansas, they’re coming from San Francisco or Chicago or L.A. It’s a different caliber for the diner.”

Katie Lazor, executive director of EatDenver, says that restaurant groups, such as Symensma’s ChoLon Concepts, might be slightly more insulated from the market’s upheavals. “Restaurant groups, like TAG, Bonanno Concepts, Big Red F, and Edible Beats, have the ability to sustain high-level positions focused on HR, operations, and marketing,” she says. “This amount of combined expertise helps groups stay competitive while opening—and sometimes closing—locations.” And this is a huge benefit when facing issues like the tight local labor market. “It’s nearly impossible to staff a restaurant these days,” Imbergamo says. “Even Beth and Jen [of Crafted Concepts, which owns Rioja, Bistro Vendôme, Euclid Hall, Stoic & Genuine, and week-old Ultreia], who are preferred employers in this town, are having a hard time.” [Editor’s note: Crafted Concepts is an Imbergamo Group client.]

Rather than a softening of the market, what’s really happening, says Symensma, is a shakeout. “It takes more forward-thinking to keep customers coming back,” he says. “Restaurants are closing that were good enough for a while, but now there are too many options.” Gschwend, Imbergamo, and Lazor all echo this sentiment, saying that without innovation, relevance, and uniqueness it’s tough to stand out and survive.

Those distinguishing factors are going to be even more crucial in the coming year as Denver’s restaurant scene thunders on. “It’s not like the avalanche has eased up,” Imbergamo says. “I have a list of 80 to 100 more restaurants that are coming.”

Editor’s Note: DJ’s Cafe and Telegraph did not respond to requests for comment.

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