It served as the landing spot for U.S. presidents and celebrities when they came into town, and a gathering place for local movers and shakers cutting deals over power lunches at Ellyngton’s, cocktails at the Ship Tavern or cigars at Churchill Bar.

Generations of Coloradans celebrated proms, weddings and honeymoons there, enjoyed holiday dinners together at its restaurants or sipped tea under the soaring atrium with their aunts, moms and grandmas. Like clockwork every January, the hotel hosted auctions for the top steers selected at the National Western Stock Show.

In a city best known for beer, the Brown Palace represented champagne.

Former employees, however, are worried that the iconic property is on a downward spiral under its current owner, Crescent Real Estate LLC and management company, HEI Hotels & Resorts.

“The hotel is dying a tragic, slow death. It is already well along in that process. It would be like walking into grandma’s house and seeing her with bruises and skinny and no food in the fridge,” said Adrian Kley, a former bellman and concierge who left the hotel in March.

Management pushed back on such characterizations, saying the company has made investments in the property — including updates to the “premium” guest rooms — with the goal of maintaining the Brown Palace’s storied reputation.

The ex-employees pointed to a series of problems that raised concerns.

A basement chimney fire knocked the hotel’s boilers, a known problem area, out of commission in November 2022. A lack of heat and hot water closed the place during the busy Thanksgiving week. Maintenance crews switched to city steam, but the boilers still haven’t been replaced, resulting in complaints about low water pressure, fluctuating water temperatures and in some cases no hot water.

Not long after the boilers went down, a pipe on the sixth floor burst flooding a dozen rooms, a second-floor meeting room and Ellyngton’s, the hotel’s largest restaurant, said Jordan Saunders, the hotel’s former food and beverage manager.

The restaurant was temporarily relocated to the second floor, and more than a year passed before the original space was repaired, remodeled and reopened. Long-time patrons complained about the outcome, saying it converted a location known for its rich color palette and warmth into something more akin to a hospital cafeteria — cold, white and sterile, Saunders said.

A damaged front door required customized repairs and allowed cold winter air to infiltrate the lobby for weeks. Another broken pipe flooded the ballroom, which is in a nearby sister tower that operates as a Holiday Inn.

Missteps have continued into this year. Discounted room rates of below $100 a night were designed to boost occupancy, but also resulted in a rise in drunken and disruptive guests, Kley said.

To cut costs, HEI made moves in March that resulted in the departure of several longtime bellmen and valets who greeted guests and contributed to the hotel’s high service levels.

Management also reduced security staff shifts, said Melanie Burrow, former director of operations at The Brown Palace. More homeless people entered the hotel and fentanyl contamination showed up in lobby bathrooms, she said.

Hotel management announced the Palace Arms, which had been operating for 74 years, would close on May 4, only to reverse course after a public outcry and bring back a limited weekend schedule. Employees who worked at the restaurant faced whiplash.

“It was heartbreaking to see how badly the building and the people were treated by the current management company and ownership,” Burrow said. “The hotel has been declining for a number of years, but it is in a free fall now.”

A storied history, an uncertain future

Henry Cordes Brown, an Ohio businessman and builder, opened the hotel in 1892 at a then-princely sum of $2 million, the equivalent of $69 million today.

It occupies a triangle at the intersections of Broadway, Tremont and 17th streets, and its red sandstone exterior and Italian Renaissance design set it apart from nearby high rises.

As other hotels in the area and other buildings fell one by one, The Brown, at 321 17th St., remained standing.

By Denver standards, The Brown is old. Yet deterioration is a constant battle in old buildings and can be held at bay, former employees said, provided owners are committed to reserving money and making the required upgrades.

Viewing a historic icon as a short-term financial investment has put the hotel on a path of alienating a loyal customer base, and disrupted the hotel’s winning formula, said Jack Johnson, formerly the chef concierge at the hotel.

By diminishing the guest experience and not adequately investing in the building, and by lacking a long-term vision, Crescent will undercut the value of its investment, creating a lose-lose proposition for everyone, he warned.

When Crescent purchased the Brown Palace Hotel in June 2018, it pledged it would usher in a “new era of luxury and refinement for the iconic property,” according to a news release at the time.

“Crescent plans comprehensive investments that will enhance the property’s 241 exquisite guest rooms and Top of the Brown suites,” the company said.

Founded by John Goff, the company has set aside about $65 million to upgrade two hotels it owns in Dallas’s Uptown neighborhood — the Ritz-Carlton Dallas and the Hotel Crescent Court, according to The Real Deal.

That indicates that Crescent understands the importance of upgrading the older hotels it owns. And Jana Smith, the general manager of The Brown Palace, disputes criticisms that Crescent and HEI have not invested adequately in The Brown Palace or in its staffing.

“Crescent has made improvements since the purchase of the hotel, including renovating premium apartment-like guest rooms, offering an elevated experience on our top floors for our discerning travelers,” Smith said.

The hotel, part of Mariott’s Autograph collection since 2012, has turned a meeting room into a club lounge, renovated Ellyngton’s restaurant, refreshed the Palace Arms and done infrastructure work on the major mechanical systems, Smith said.

And plans are in the works for an upgrade of the Atrium Lobby, one of the hotel’s most distinctive features.

Former employees counter that the hotel’s previous owner had already made plans for the suite upgrades that Crescent followed through on. The Ellyngton’s renovation occurred because of the flooding from a broken pipe after plumbing, HVAC and other critical systems were neglected.

Crescent Real Estate is no stranger to Colorado, but its primary focus here and elsewhere has been on office buildings — including the Riverpoint, Riverview and Platte Fifteen office buildings in Denver. The Brown wasn’t its first hotel, but it represented a level of luxury it and HEI weren’t accustomed to, Johnson said.

Things came to a head in March, former employees said, when HEI tried to squeeze out money for repairs by reducing overhead. Among the cost-cutting moves was handing over valet and door services, which helped set the property apart and had been handled by employees with decades of experience, to an outside provider.

Although workers were offered positions at the other firm, the benefits were less and switching would require going for a month without health insurance coverage, a nonstarter for older workers, Kley said.

Smith disputes claims that The Brown has drastically cut its staffing level. In 2019, The Brown had 273 employees and today it has 254 positions, both filled and available. That lower headcount reflects the hit the hotel, like so many others, suffered during the pandemic, when travel ground to a halt.

“This is relatively minor given the market impact since 2020 and our goal is to get back to 273 plus,” she said.

Falling stars a bad omen

“The first day after (Crescent Real Estate) took over, they wheel us into a meeting room and say: ‘You no longer work for a hospitality company, you now work for a real estate company.’ My heart sank. A lot of us thought but how bad could it get?” Johnson said.

The answer wasn’t long in coming. The Forbes Travel Guide stripped The Brown Palace of its coveted four-star rating in 2020, a designation it had held since 1958, when it became the first Colorado hotel to receive it from Mobil, which originated the rankings, Johnson said.

“The Brown Palace is a (AAA) four-diamond hotel, and after the pandemic, we did not pursue a rating with Forbes since our TripAdvisor and Google ratings are both 4.5 stars which are ratings given by our guests; we believe this feedback is the most critical to our success,” Smith said.

TripAdvisor reviewers do give the hotel an average rating of 4.5, and numerous glowing reviews praise the hotel’s courteous employees, its beautiful design and rich history and the overall experience of staying there.

Where TripAdvisor ranks the hotel overall based on those reviews tells a different story. The Brown comes in 52nd out of 162 hotels in the metro area. Among luxury hotels, a much smaller category that it once dominated, it ranks ninth behind the likes of Halcyon, Four Seasons, the Crawford Hotel and Le Meridien.

U.S. News & World Report ranks the Brown Palace as 12th best hotel in Denver, 26th best in Colorado and 633rd best in the U.S.

Critical reviews are spread among the more complimentary ones on TripAdvisor. A sampling of some more recent and scathing comments:

• “I’ve stayed at other hotels for a fraction of the price with a million times better experience. For a ‘luxury’ hotel that costs several hundred dollars a night, a warm shower in a clean bathroom with edible room service food should be the bare minimum and the Brown Palace simply didn’t deliver.” — Vivian P., a guest from Plano, Texas.

• “This grand old hotel has fallen into disrepair. We’ve stayed at The Brown Palace for decades when visiting Denver, it’s lost its charm. The lobby is of course spectacular but it stops there. The room was awful. Chipped furniture, glass surfaces smeared, woodwork chipped and marked up, horrible bed, no water in the room, the air conditioning was abysmal, lukewarm at best. Very, very sad to see this beautiful old (lady) no longer treated with care and respect. It’s a real shame.” — yoginiok from Tulsa, OK

President Dwight Eisenhower made the Brown Palace his western campaign headquarters. The Beatles stayed there when they played their first concert in Colorado. It was among the locations where global leaders gathered for the G-8 Summit in 1997. And the Denver Broncos football team — that came together in the hotel’s lobby.

Have no doubts, Johnson said, The Brown Palace is no longer Denver’s top hotel.

“That star designation is a big thing on the luxury level. It is your identity to quality,” he said. “If you don’t care about it, you won’t get it. They didn’t care enough to try and meet the standards.”

Tough times in a tough neighborhood

Hospitality industry analysts looking in from the outside offer a slightly different take than front-line employees, saying that historic hotels and restaurants in downtown areas were among the hardest hit by the chaos the pandemic unleashed in 2020.

Business travel evaporated for months, cutting into a key revenue source for downtown properties. Remote work resulted in fewer office workers in the area and smaller crowds showing up for lunch or staying for drinks after work, said John Imbergamo, president of The Imbergamo Group and a long-time marketing consultant to restaurants.

The George Floyd protests in the summer of 2020 created a perception that downtown wasn’t safe, especially among older adults more likely to visit The Brown. The seemingly never-ending redevelopment of the 16th Street Mall has tested the staying power of numerous businesses in the area. It will be an improvement, but for now, it has made downtown a harder place to navigate.

Gravity in the downtown area has also shifted west to LoDo, the Central Platte Valley and RiverNorth. The Brown, once at the center of the action, increasingly finds itself at the periphery.

A loss of identity also appears to be at play. Johnson said the luxury hotel niche is a demanding space, but one that The Brown excelled at for years. By moving the hotel away from luxury toward more of a full-service model, the competition has expanded from about a half dozen serious rivals to more than 100. Standing out will be harder.

“In this type of hotel with such a deep-seated connection to the community and frequent guests, they will need to bring it back to prior service levels,” said Allison Ahrens, president of Hospitality Revenue Solutions in Denver.

There are examples of how that can be done. Although smaller and a year older than The Brown Palace, the Oxford Hotel near Union Station has invested consistently in upgrades and the guest experience, allowing it to remain a popular destination.

Its art-deco Cruise Room Bar, which opened on the day Prohibition ended in 1933, has crossed generational boundaries to become a destination in its own right.

The Crawford Hotel, carved from the marrow of the upper floors of Union Station, which is older than both the Oxford and Brown, now surpasses The Brown Palace on TripAdvisor rankings.

Despite being only a decade old, the Crawford underwent an $11 million upgrade earlier this year funded by the Union Station Alliance.

Being up there in age and being located downtown isn’t synonymous with failure, Imbergamo said. A lot of boutique hotels with popular restaurants have sprung up in recent years, proving that a market exists for a retro vibe.

A describable vibe was in short supply on a stay at The Brown Palace in late July. One person manned the main door, another the concierge desk and a third worked the front desk, where there was no line to check-in in the evening. No cookies or snacks were offered, only water in a plastic bottle.

Cocktails and music in the atrium lobby were advertised but not provided.

If security was present, they were as invisible as the “friendly” ghosts that supposedly haunt the hotel.

The room was clean but showing its age. Fixtures were worn aside from a newer LG television. Hot water took about two minutes to show up, but it did show up and the pressure was adequate. Unlike what another guest complained about while riding the elevator, which worked fine, the toilet didn’t back up.

“It doesn’t matter how much investment comes back into that property, the damage from the neglect is incalculable,” Kley lamented. “HEI steps over dollars to pick up dimes. They don’t want the money that comes with providing service.”

Kley said he heard from numerous regulars in his three years there who had finally suffered enough disappointment that they weren’t coming back.

“I saw the final straw for people who had a relationship with that building since they were children,” he said. When the bellmen and valets they respected were put in a tough spot, he and Johnson decided they had reached a final straw and resigned.

Employees kept hoping that Crescent would realize it had overpaid and wouldn’t obtain the return it had wished for. They hoped it would throw in the towel and sell before too much damage was done, Johnson said. They kept giving their best effort to preserve the hotel’s reputation.

If a hotel has “good bones” it can be rescued from poor management and underinvestment, said John Keeling, executive vice president at Valencia Hotels, which specializes in acquiring and refurbishing higher-end historic and luxury properties.

The Brown Palace still has people everywhere who love what she represents, Johnson said.

His hope is that one day the historic hotel will again be the toast of Denver.

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Denver developer Travis McAfoos, part of a team that purchased the restaurant and 5.4 acres of surrounding land out of bankruptcy in 2022, filed a pre-application with Jefferson County Planning and Zoning on Aug. 7 to convert the site to a QuikTrip location.

“The current property owners are evaluating the feasibility of relocating the existing restaurant to a nearby property, thereby creating the opportunity to redevelop the property by utilizing the existing property’s footprint,” wrote Coy Williams, a project manager with Kimley-Horn and Associates, a national design, engineering and consulting firm tasked with the redevelopment effort.

Williams wrote that a second access point would be added on the west side of the existing parcel and that QuikTrip’s proposed design would maintain the mountainous characteristic of Evergreen’s area plan, keeping the one structure planned to a single-story, even though zoning allows for up to three stories.

Founded in 1948, El Rancho has seen multiple owners and tried different formats over the years, including hosting a gift shop and more recently a brewpub. Despite its longevity and popularity as a stop, the restaurant building doesn’t have a historic designation, leaving its fate in the hands of Jefferson County planners.

A day before McAfoos filed the request to convert the El Rancho parcel to QuikTrip Store #4288, his co-investors, Evergreen commercial real estate developers Jack and Sherry Buchanan, through their company Observatory Holdings LLC, submitted a pre-application to develop a hotel, bar and restaurant on land between the El Rancho and the highway.

They are proposing three buildings on the site: a restaurant at 6,500 square feet, a bar at 1,600 square feet and a hotel with 18,500 square feet, as well as a 181-space parking lot.

On the northwest corner of U.S. 40 and Rainbow Hill Road, the site once hosted the now-demolished Observatory Bar. It has two existing access points, and the Buchanans are negotiating additional right of way from the Colorado Department of Transportation, according to a letter filed with the county, also by Kimley-Horn.

McAfoos, reached by phone, declined to comment on the redevelopment of the El Rancho parcel or the fate of the restaurant. Sherry Buchanan did not respond to an interview request.

When McAfoos and the Buchanans acquired the struggling restaurant from Paul Vincent and his family, they seemed committed to its future, bringing in Bonanno Concepts, run by chef Frank Bonnano, to revamp the food service at the start of 2023.

That arrangement, however, only lasted until this April, with Bonanno’s departure partially blamed on the controversy surrounding a mandatory service fee included with every bill.

“Bonanno Concepts will no longer operate El Rancho Colorado, as our vision and values differ from the rest of the current investor group,” the company said in a statement at the time. “We wish them the best in their new approach and look forward to refocusing our attention on our Denver-based restaurants.”

QuikTrip, based in Tulsa, announced its first Colorado location in June 2022 on the site of Pasternack’s Art Hub in Lakewood, previously a pawn shop, and now has 13 locations, with up to 60 proposed for Colorado at one point.

“QuikTrip prides itself on its relations with its customers and the surrounding community,” Williams wrote in his pre-application letter, adding that the company “will soon launch a public website to provide information on the project.”

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“The affected employees who do not relocate or secure other positions within the company will be eligible to receive paid severance benefits based on years of service and the opportunity to continue participating in the company’s health plans at active rates for a period of time,” Ashley Frazier, an executive in the bank’s Displacements Advisory Group wrote the state in a Worker Adjustment and Retraining Notification Act or WARN letter.

Frazier said more specific information on job titles involved, notice dates and number of displaced employees would follow once official written notices went out. The layoffs are being made at 5700 S. DTC Parkway, Building 15.

The cuts are expected to start next month and wrap up in the fourth quarter, the company said.

The Chief Operating Office works to ensure smooth operations within the bank’s core business lines such as consumer lending and commercial banking. It oversees client services, contact center operations and the movement of money within the bank, among other things.

The layoff follows one announced in June involving 80 workers at the bank’s internal audit unit at 1700 Broadway in downtown Denver.

Wells Fargo, based in San Francisco, reported having 226,000 employees at the end of last year, down about 12,000 from the prior year.

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But Sturm never lost his work ethic, his vision for the future, his desire to help the larger community in the present, and his sense of humor, family and colleagues said.

Sturm, a mover and shaker on Denver’s business scene in the 90s and 00s, died on Saturday at age 92, overcoming his setbacks and leaving his indelible mark on Colorado.

“He was in the office every day — even until right here at the end,” said Koger Propst, CEO at ANB Bank, which Sturm strung together from a group of troubled banks he acquired during the Savings and Loans crisis in the early 1990s.

Propst said Sturm was a thoughtful and strategic thinker who even into his late 80s and 90s never stopped planning.

Sturm’s second son, Stephen, described him as an amazing father, who was kind, attentive and thoughtful. He said his father worked until late last month and when he died this weekend, he was surrounded by family.

“He clearly lived a very busy life but he always made time for his family. You learned a lot through what he said, but you learned more through how he operated,” Stephen Sturm said.

Born Donald Lawrence Sturm to an immigrant family in Brooklyn on Jan. 10, 1932, Sturm attended City College of New York before being drafted into the U.S. Army. He moved to Denver to earn his law degree at the University of Denver, and then returned to New York, where he obtained a master’s degree in taxation law.

After working as an attorney for the Internal Revenue Service, Sturm joined the engineering and construction firm Peter Kiewit Sons Co. in Omaha, eventually becoming vice chairman. In 1984, he guided the company’s acquisition of Continental Group, a multi-national conglomerate.

In 1987, Sturm, previously married, met and married Susan Morgan, who survives him, along with his four children — Robert Sturm, Melanie Sturm, Stephen Sturm and Emily Sturm Ehrens.

The Sturms began acquiring failed banks and troubled properties in the early 1990s after Don left Kiewit and moved to Denver, which was especially hard hit by the S&L crisis, to be closer to their investments. The acquired banks, owned by Sturm Financial Group, came together as Denver-based ANB Bank, which now has 30 locations and $3 billion in assets.

Sturm emphasized building local management teams connected to the local community at each bank location, and understood the important role independent banks played, Propst said.

The family enterprise, named Alder, oversees the real estate holdings and has established master-planned communities over the years, the most recent being The Meadows at Castle Rock, where 20,000 residents live.

Sturm invested heavily in Cherry Creek North, redeveloping the old Tattered Cover building and creating Fillmore Plaza, and its investment arm has funded several startups.

Sturm also was part of a group that helped Continental Airlines emerge from bankruptcy in 1993 and he helped Kiewit spin off what would become Level 3 Communications.

That telecom investment, and a significant holding in WorldCom –once the country’s second-largest long-distance provider– helped Sturm reach an estimated net worth of $3.2 billion in 1999, per Forbes.

That year, he bid $461 million for Ascent Entertainment Group, owner of the Denver Nuggets, Colorado Avalanche and the soon-to-open Pepsi Center, beating a $400 million bid from Bill and Nancy Laurie, heirs of Walmart founder Sam Walton.

But city officials wanted guarantees that a new owner wouldn’t move either team for 25 years, which Sturm contested. That allowed Stan Kroenke, also associated with the Walton family, to slip in and acquire the two teams and arena in 2000.

Over the years, Sturm and his foundation have supported several area groups and institutions, including Judaism Your Way, which Sturm founded after rabbis refused to marry him and Sue; the Jewish Community Center of Denver; the Denver Museum of Nature and Science; the Summit Huts Association and Arapahoe Community College.

In 2019, the Sturm Family Foundation donated $10 million for ACC’s Sturm Collaboration Campus, the largest gift in the history of Colorado’s community college system.

“Don Sturm was a visionary in imagining a fully inclusive, welcoming home to interfaith and mixed heritage families. He was steadfast and unwavering in his support of Judaism Your Way’s mission to welcome Jews and their loved ones with unconditional love. The wider Jewish world has changed and become more inclusive as a result of his dedication,” Rabbi Caryn Aviv wrote in an email.

His greatest financial generosity, however, was reserved for his alma mater, the University of Denver, where the Sturm College of Law, the classroom building Sturm Hall, and the Sturm Center, a psychology program that helps veterans and those in the military, carry his name.

“From the time he was a determined law student on our campus until the last day of his service as a trustee, Don Sturm, along with his wife, Susan, made so many contributions to the DU community,” Chancellor Jeremy Haefner in an email.

In 2016, the university awarded Don and Sue its first inaugural Founders Medal, the highest non-academic honor the university can bestow.

”You want to help people. You can’t take it with you,” Sturm said in a video accompanying his admission into the Colorado Business Hall of Fame in 2022. “You want the place where you live to be a better place because you lived there.”

The Sturm family will hold a private funeral and memorial service. Donations in Sturm’s memory can be made to Judaism Your Way, 950 South Cherry St., Suite 310, Glendale, CO 80246-2699. Those impacted by Sturm’s life are asked to share memories and stories via a letter to “The Sturm Family” at 3033 E. First Ave., Suite 300, Denver, CO 80206.

The number of unemployed individuals in the state rose by 1,800 from June to 126,300 in July. Colorado’s unemployment rate remains below the U.S. rate of 4.3%. The size of the state’s labor force rose by 5,500 workers last month.

Employers in the state added 4,800 non-farm jobs last month, with 2,500 of those coming in the private sector and 2,300 in the public sector. That is more than triple the 1,500 net new jobs added between May and June.

Broomfield-based economist Gary Horvath described July’s gains as “bland and broad-based,” but called them a positive given the slowdown happening in hiring nationwide.

“On a positive note, 14 of 19 sectors tracked in the analysis of Colorado employment recorded increases in July, suggesting that companies are likely to be hiring on a limited basis rather than firing. For July, the change in employment was modest. More importantly, it was broad-based,” Horvath said in an email.

The biggest private sector gains came in trade, transportation and utilities, up by 4,100 jobs. Manufacturing had the biggest loss with 1,000 jobs shed in July.

Over the past year, the state has added 43,200 jobs, with 24,800 coming in the private sector and governments adding 18,400 jobs. The biggest contributors to annual job growth have been educational and health services, up 11,600 jobs, and professional and business services, up 7,400.

Construction has suffered the biggest annual decline at 4,200 jobs, followed by the information sector with a loss of 2,800 jobs.

Colorado’s annual rate of job growth is 1.5%, just under the U.S. rate of 1.6%, according to the report.

Weld County Sheriff’s Office deputies found the inmate at 3:09 p.m. Sunday and attempted to administer CPR, calling in medical staff and paramedics. The inmate was pronounced dead and the Critical Incident Response Team was brought in to investigate.

The Weld County coroner plans release the identity of the deceased inmate once relatives are notified. Anyone with information about the incident is asked to contact Detective Brain Hunziker with the Greeley Police Department at Brian.Hunziker@greeleypd.com.

Weld County jail inmate Keith Schmedtje, 50, died while in custody on May 16 of this year. And another inmate died last November after experiencing a medical emergency.

Inmate Amy Lynn Cross, 41, died in September 2021 after complaining for seven hours that she was having difficulty breathing and not receiving medical treatment, according to a lawsuit filed by her family against the jail’s medical provider and Weld County.

Undetected bags of methamphetamine broke open two days after she was booked into the Greeley jail, according to the complaint.

But it could also complicate home purchases for first-time buyers and shake up the real estate brokerage industry.

“This is an opportunity for us to adjust and adapt. In this day and age, so many people are seeking out transparency, and this change in practices gives us that,” said Natalie Davis, a Realtor with Keller Williams Realty Downtown in Denver.

Although buyers and sellers alike could always negotiate terms, including the commission rate, with their agents, industry practice settled into a pattern where sellers paid commission costs in the 5% to 6% range for both sides of a transaction.

Home sellers in Missouri sued to end the practice, which they argued wasn’t fair and had them paying more out of pocket than necessary. The National Association of Realtors settled the case in March for $418 million and agreed to change some of its long-standing practices effective Aug. 17.

One of the biggest changes regards the posting of what a seller would pay an agent bringing a buyer to the table on the multiple listing service or MLS, which local Realtor associations have historically owned.

Agents could see the cooperative compensation information, but consumers didn’t have easy access. So long as sellers were footing the bill, wrapping the commission costs into the sales price, which lenders would finance, it didn’t matter much.

“No longer can real estate brokers put their commissions on the MLS. But they can put that information on their own websites. That is what you are going to see more of. But that will be up to each individual brokerage,” said Tyrone Adams, CEO of the Colorado Association of Realtors.

Buyer agents can contact the listing agent directly to obtain that information when it isn’t publicly available, an added step, but not a huge one.

Separating the commission information from platforms owned by Realtors was meant to address allegations of collusion, while also providing sellers more flexibility in compensating buyer agents.

“Sellers will need to be aware that by not offering compensation, they may diminish the buyer pool. It is the buyer’s choice, not the Realtor’s choice,” said Kelly Moye, a Realtor based in Northglenn.

Steering, or the practice of agents avoiding listings that are less favorable to them, is still prohibited. But it isn’t against the law for buyers to set such conditions.

That is where the tug of war will happen. A buyer who doesn’t have the extra money to cover their agent’s commission may want to limit the listings they consider to only those where the seller has agreed to pay.

But the starter-home market is also where homes sell the fastest and with multiple offers.

Even when the seller is willing to pay a buyer’s agent, showing up with a commission request below the competition could save a seller money and push an offer to the top, said Holden Lewis, a home and mortgage expert with Nerd Wallet in a blog post.

By negotiating on the front end with their agent, buyers can improve their chances when it comes to securing a purchase.

Agents will want to get paid — either by the seller or the buyer — and contracts will state that. But if the buyer is strapped, which is often the case with first-time buyers, they should try to negotiate terms.

“The contract will state how much you will pay the agent representing you either in a flat fee or a percentage of the purchase price, both of which are open to negotiation. Other elements up for negotiation include duration of the contract and geographic area (one or more addresses, zip codes, cities, and counties) for the scope of your search,” Holden said.

The settlement requires buyer agent agreements, which Colorado has long required.  Even standardized contracts leave room for negotiating. If an agent isn’t willing to budge or can’t seem to justify what they are asking for in compensation, consumers are encouraged to look elsewhere.

“As to the regular contract with a financial obligation to compensate the buyer agent, they should not sign this agreement unless they’ve read and understood it and it’s fair to them,” said Stephen Brobeck, a senior fellow at the Consumer Federation of America.

Buyers should request a copy of the agent contract and review it closely before signing, avoiding agents who don’t provide an advanced copy. Buyers should always weigh the services they will receive against the costs.

“We suggest they aim at the dollar equivalent of 2% or less of the sale price,” Brobeck said.

The average buy-side commission paid on a home purchased in Denver was 2.56% in July, down from 2.64% in January, according to a study from Seattle brokerage Redfin. Denver had the 18th highest commission of the 50 metro areas that Redfin examined.

Home tours a sticking point

Most listing agreements don’t allow a buyer to show up and tour a home on their own, aside from an open house. Part of that is to protect sellers, who typically leave when a showing is held and who don’t want strangers walking through their personal space unaccompanied.

The National Association of Realtors, as part of its proposed settlement, is requiring that brokers sign a “touring” or “showing” agreement before taking a potential buyer through a property. It isn’t a full-blown buyer-agent agreement, but will likely discuss compensation should the person touring decide to buy a home.

“The idea is to provide transparency to the buyer regarding compensation and where it will come from,” Moye said.

The Colorado Real Estate Commission, however, argues that showing agreements aren’t required by state law and are part of licensed brokerage duties, said Marcia Waters, director of the Colorado Division of Real Estate.

“That isn’t a consumer-friendly practice and if someone wants to see a property, they shouldn’t be forced to sign an agreement,” Waters said, adding the commission has told the Colorado Association of Realtors as much in a letter.

The Real Estate Commission provides many standardized forms the industry uses, but hasn’t created touring agreements and doesn’t plan to, Waters said.

“If brokers are using touring agreements, they have to hire a licensed Colorado attorney to draft those,” she  warned.

A tougher time for first-timers

Current homeowners who are trading up will typically have enough equity in their homes to cover the cost of an agent. They are also less likely to need hand-holding and can take on more tasks themselves. More concern is focused on first-time buyers.

“First-time buyers are those who need the agent the most. They are also the least likely to be able to afford their buyer agent compensation,” said Lindsey Benton, broker/owner of Live.Laugh.Denver. Real Estate Group.

Downpayment and closing costs are already a burden for many first-time buyers and covering agent fees will add to the upfront expenses that lenders still haven’t figured out how to roll into a mortgage. First-time buyers are also the most vulnerable if they try to go it alone.

The changes could revive less common practices, such as transaction brokers, who behave as arbitrators for both sides rather than fiduciaries for one side or the other, or using an attorney to draft a legally binding contract or buyer self-representation.

New technology-focused alternatives are already arriving. On the same day the NAR changes took effect, San Francisco startup Shay, which describes itself as the “first self-representation” platform for homebuyers, launched.

The tagline on its homepage is: “Buy a home without a realtor. Save $1000s.”

“Paying a real estate agent a fixed percent of a home transaction is simply a bad deal for many homebuyers. We enable homebuyers to save money by doing it themselves. This is similar to how TurboTax gives tax filers an alternative to accountants or Expedia gives travelers an alternative to travel agents,” said Peter Jeffrey, the company’s CEO and founder in a news release.

The platform offers more than 20 guides to help buyers with each step of a transaction and claims its AI models can generate offers, assist with negotiations and review agreements.

Adams counters that purchasing a home is the most complex transaction most consumers will ever undertake and having a trained professional assisting comes with important benefits.

“People will have more conversations about these things and understand what it means for them. That isn’t a bad thing,” he said.

Prices for a basket of consumer goods and services in the Denver-Aurora-Lakewood area rose 1.9% between July 2023 and July 2024, compared to a 2.6% annual gain in May and a 2.8% gain in March, according to an update Wednesday from the U.S. Bureau of Labor Statistics.

Metro Denver’s Consumer Price Index gain is a full percentage point below the 2.9% annual rate measured nationally in July. But in a worrisome sign, prices shot up 0.62% between May and July, nearly four times the 0.15% gain measured nationally.

“In many ways, July’s result was the most ‘normal’ inflation reading we have seen since the pandemic began, and could have easily been produced in 2019,” said Douglas Porter, chief economist with BMO, in a commentary.

Falling gasoline prices, down 12.1% on the year, used car prices, down 9.7%, and apparel costs, down 4.5%, put downward pressure on inflation in metro Denver. Grocery store prices were flat, with decreases in cereals, baked goods, vegetables and fruits, offsetting gains in dairy products and meat.

Despite that, the cost of eating out rose 5.7%, reflecting higher labor and lease expenses at restaurants. Shelter costs also continue to outpace overall inflation, rising 3% the past year and 1.2% in the past two months. The flare-up in rents, if sustained, could fuel inflation in the months ahead given the heavy weight shelter costs hold in the index.

Inflation on the whole, however, is moderating enough to provide the Federal Reserve maneuvering room to declare victory and start cutting rates, said Selma Hepp, chief economist with CoreLogic, in emailed comments.

“This means for the average American that the Fed will likely cut interest rates next month, which will slightly bring down the cost of borrowing – a good step for auto and home sales, in particular,” Hepp said.

Even though the pace of inflation is moderating, its impacts are here to stay. Colorado consumers have seen prices rise 20% since 2020, resulting in the typical household spending $34,194 more cumulatively since 2020, according to estimates from the Common Sense Institute.

One Planet Group LLC, founded by tech entrepreneur and investor Payam Zamani, agreed to invest $10 million in return for 2.9 million shares of common stock and a similar number of warrants.

Zamani will take over as CEO from Eric Grosse and replace Brad Handler as chairman, a role Handler has held since he founded the company with his brother Brent in 2010. Zamani will appoint three new directors to the seven-member board.

To cut $25 million a year in costs, the company said it would eliminate 15% of its workforce immediately and rework or terminate its unproductive vacation property leases.

The company, headquartered at 1544 Wazee St., has about 630 employees, which equates to about 95 employees being let go.

“While the decision to reduce our workforce was not easy, I’m grateful for the hard work and dedication of the entire team and am confident that under Payam Zamani’s leadership, Inspirato will continue to provide a world-class travel experience to its members for years to come,” David Kallery, president of Inspirato, said in a news release.

Inspirato offers members access to luxury vacation homes, stays at luxury hotels and resorts and custom-designed itineraries, like safaris.

After years of rapid growth, the company has struggled to maintain its membership base and the current round of layoffs is the company’s third in two years. Brent Handler stepped down as CEO last September.

On Tuesday, the company reported second quarter revenues of $67.4 million, down 20% from the same quarter a year earlier. Inspirato had a net loss of $15.4 million, compared to a net loss of $46.7 million a year ago. That 2023 number included a special non-cash charge of $30.1 million.

Inspirato went public three years ago and until late last year its shares were trading above $17. But this year shares have traded mostly under $4, aside from a brief spike in late July. Shares of the company closed at $3.59 on Tuesday after gaining 4.7% on the day.

The company’s share price has dropped so low that it faced a delisting from the Nasdaq stock exchange, but earlier this month Inspirato said it received a reprieve until Nov. 22 to comply with listing requirements.

While the region’s housing market may never flip fully in favor of buyers, a more balanced market appears to be on the horizon, and it has been a long time coming.

“It has been a seller’s market for so long, but more neighborhoods are becoming friendly to buyers,” said Lon Welsh, founder and managing broker with Your Castle Real Estate, which analyzed trends in 256 neighborhoods, mostly in metro Denver but also Colorado Springs.

Within Denver, Highlands East, Cherry Creek and Belcaro to the south are now buyer’s markets with a more than six-month supply of homes available at the end of June. West Colfax, Roxborough West and Castle Pines Villages have also moved into the buyer’s camp.

One way to measure the balance of power between buyers and sellers is to look at months of inventory. If an area has 10 sales a month and 20 homes for sale, then it has a two-month supply of inventory. More inventory and slower sales favor buyers, while a shortfall of listings and quick turnover benefits sellers.

A seller’s market is typically defined as one having under four months of supply, while an extreme seller’s market, at play most of the time from 2016 to 2022, has under one month of inventory, Welsh said.

In extreme seller’s markets, buyers have almost no negotiating power. They must make an offer immediately and beat out multiple bidders. Setting conditions such as passing an appraisal, requesting an inspection and asking for any needed repairs is a nonstarter with sellers.

A buyer’s market, by contrast, has six months or more of supply available and is often associated with periods of economic distress. Properties languish for months and buyers can take their time and drive a hard bargain. The region’s longest and most severe buyer’s market came in the late 1980s during the oil and gas bust, when the months of inventory topped 10 for three years.

The housing crash from 2006 to 2010, despite the numerous foreclosures, was a mild buyer’s market compared to the late 1980s. Falling prices left people hesitant to buy, until prices got low enough that they couldn’t resist. By 2012 the market had shifted back into seller’s territory, where it has remained, per Your Castle’s analysis.

A balanced or neutral market has between four to six months of supply and neither side has the upper hand. Despite being highly desired, balanced markets tend not to last when they do show up, Welsh said. That’s because they usually represent transition phases to more extreme conditions.

Twenty-six neighborhoods met the definition of a balanced market, including Cory Merrill East, Park Hill North East, Sloan West, Sunnyside East, Washington Park West, Regis and Wellshire.

Metro Denver had 2.78 months of inventory in the second quarter, and in most places, sellers still have the upper hand, Welsh said. But they don’t have the power they did in early 2021, when there was only 0.4 months of supply.

About a dozen neighborhoods, out of the 256 examined, remain an extreme seller’s market with less than a month’s supply of inventory. Even with high mortgage rates, they face the extreme conditions seen during the pandemic.

With only one listing available at the end of June, North Commerce City had the region’s tightest housing market with only 0.3 months of supply.

Another Commerce City neighborhood, Rose Hill, was not far behind with only two weeks of inventory. Sherrelwood North, near Twin Lakes in Adams County, claimed the third-strongest seller’s market in the second quarter.

Countryside East, Northhaven, West Woods Ranch, Oakbrook, West Ridge, Old Thornton North, Parkwood, Apple Meadows and Westbrook North were the other areas with under one month of inventory.

Most of the extreme seller’s market neighborhoods have below-average home prices, which might explain their popularity. Golden’s Apple Meadows and Arvada’s West Woods Ranch were the exceptions.

Larger shifts in preferences may also be at play in some areas. People can live farther out from work because of more remote arrangements, which has diminished the popularity of central Denver neighborhoods, said Jenny Usaj, owner of Usaj Realty in Denver.

Downtown Denver has struggled with a negative spiral, where declining office and retail activity has hurt condo and townhome activity and that has spread to other neighborhoods near the urban core.

Beyond the shift to remote work, millennials, the prime demographic buying homes right now, are increasingly looking for locations they consider more favorable for starting families.

“Many individuals and families, particularly those in their mid-30s who are married and considering having children, are moving out of urban centers in search of larger homes and more space,” she said.

Walkability remains part of the conversation, but Usaj said smaller city downtowns like Golden, Arvada and Littleton can “provide a nice blend of local, walkable, and financially sensible options without having to travel to Denver.”

Signs that the market is shifting include more contract cancellations, fewer homes selling above list price, and properties spending more time on the market.

Buyers, if they aren’t locked into one specific area, should prioritize locations with more months of inventory to secure better terms and a greater discount, Welsh advised. But he also acknowledges preferences and emotions can steer the homebuying decision, not pure logic.

Time will tell if the market continues to shift in favor of buyers or if a sustained drop in mortgage rates will steamroll them.

One scenario put forward in real estate circles is that lower interest rates will improve affordability and unleash a surge in pent-up demand, bringing a milder sequel to the overheated market of 2021 and early 2022.

Yet, a softer economy, which is why the Fed would start cutting interest rates, could counteract that by knocking more buyers out of the hunt and making sellers more motivated to list their homes.

While Welsh doesn’t predict the local housing market will go fully into neutral or beyond, he said buyers are gaining a level of negotiating power they haven’t had in years.

“It’s my expectation that inventory will continue to build for the rest of the year, and more neighborhoods will migrate to buyer market status,” he said in an email. “I don’t think – for most neighborhoods – there is danger of price drops, but I don’t expect much appreciation either.”

Buyers still won’t be in charge in most places, but things will be easier for them than they have been, he said.