DENVER | Main Development Thread #7

[SirLucasTheGreat]

Thanks for sending that. I think there some posts about Harbinger's tentative plans last year but I don't believe anything has been submitted to the city, right? I would love to see that and their 16th and Welton holdings get developed into residences but I'm not sure that will happen.

[BG918]

Originally Posted by CherryCreek

Golden Triangle is really starting to get a critical mass of serious density. . . . but... where's the retail?

For such a dense area its amazingly short on restaurants, bars, breweries, wine bars, art galleries, retail and the other stuff that really makes RiNO so hot right now.

I hope that comes too.

Agree this neighborhood lacks retail/restaurants and can be pretty sleepy even with all of the new development. There is a Choice Market coming to Parq on Speer at 9th & Bannock. The Modera project at 11th & Bannock will have 9k sf of retail space along Bannock. The Lennar project at the other corner of 11th & Bannock will also have a decent amount of retail space. So maybe Bannock becomes more of a retail street in the future, along with the existing concentration of businesses along 11th.

There is also the Evans School which will likely be redeveloped soon. I'm not sure what their plans are but I've heard some type of community gathering space on the first floor and offices above.

I'd like to see Broadway get more businesses and retail in this area. It's always had a grimy feel compared to the Golden Triangle or even Capitol Hill next door. Still several large parking lots facing the street and the abandoned Sports Castle and adjacent garage. I was excited when the Alta Sports Castle project was announced but it appears to be dead..

[TakeFive]

Originally Posted by BG918

I'd like to see Broadway get more businesses and retail in this area. It's always had a grimy feel compared to the Golden Triangle or even Capitol Hill next door. Still several large parking lots facing the street and the abandoned Sports Castle and adjacent garage. I was excited when the Alta Sports Castle project was announced but it appears to be dead..

Has anybody tried the new food hall called Broadway Market at 950 Broadway?

Alliance Res (Castle Broadstone) took over the Sport Castle property in July of last year but other than an initial project concept it's been crickets.

The old hot spots that once existed along Speer were torn down for redevelopment. There isn't otherwise any legacy areas for retail-entertainment.

[SirLucasTheGreat]

I have been to Broadway Market. Seems like it is always rather packed and Lennar will be bringing 1,600 units within a one to three block walk of it over the next 5-7 years

[TakeFive]

^^ Good to hear.

Take that hotel project and shove it

put away the shovels and shove those plans back on the shelf.

With airlines taking the biggest hit from the coronavirus fallout, hotels are not far behind. Even in coronavirus-free Denver the "largest physics convention in the country" with over 10,000 expected attendees was canceled at the last minute over the weekend for what was to start on Monday.

In their most recent roundup, DenverInfill notes that the Thompson Hotel and Hyatt Centric are already under construction. Add McGregor Square and the Emily Griffith hotel as being under construction. Anything else?

Lenders and equity investors were already looking more closely at proposed hotel deals. I've always thought the WTC hotel proposal to be a bit dicey (too early) for that location. Good chance that the Marriott convention center hotel gets delayed. Most others are no-hopers for now.

[CherryCreek]

Originally Posted by TakeFive

^^ Good to hear.

Take that hotel project and shove it

put away the shovels and shove those plans back on the shelf.

With airlines taking the biggest hit from the coronavirus fallout, hotels are not far behind. Even in coronavirus-free Denver the "largest physics convention in the country" with over 10,000 expected attendees was canceled at the last minute over the weekend for what was to start on Monday.

In their most recent roundup, DenverInfill notes that the Thompson Hotel and Hyatt Centric are already under construction. Add McGregor Square and the Emily Griffith hotel as being under construction. Anything else?

Lenders and equity investors were already looking more closely at proposed hotel deals. I've always thought the WTC hotel proposal to be a bit dicey (too early) for that location. Good chance that the Marriott convention center hotel gets delayed. Most others are no-hopers for now.

Yep, gotta agree with all of that. We've seen this movie before - 2008. The firmest of plans can evaporate overnight when things go south.

I really loved the proposed Marriott... if the current crises delays that, I still hope it eventually gets built in its current proposed form.

[Jmc84]

For the uninitiated (me), what are the odds that something like the WTC, which was supposed to break ground in Q2 of this year, cancels or delays as a result of current global market risk an uncertainty?

Are things pretty much locked in if you're only a few months out from groundbreaking, or is is possible/common for the plug to get pulled at this stage if investors get skittish?

[bulldurhamer]

Originally Posted by TakeFive

For now, until a higher threshold of new pain, the markets are likely to stabilize and indeed futures are showing a bounce. Specific winners and losers can be sorted out (Clorox stock was up). With respect to Denver and construction at this point it's not an issue - other than for investors becoming nervous about increased potential risks.

[TakeFive]

Originally Posted by Jmc84

For the uninitiated (me), what are the odds that something like the WTC, which was supposed to break ground in Q2 of this year, cancels or delays as a result of current global market risk an uncertainty?

Are things pretty much locked in if you're only a few months out from groundbreaking, or is is possible/common for the plug to get pulled at this stage if investors get skittish?

Excellent questions!

The rule of thumb is that once the ink is dry on the construction loan and the money is in the bank, it's gonna get built.

With respect to the WTC office project that one could go either way. Golub and it's Life company equity partner are reasonably conservative and could decide to delay the project but can also afford to take the long view and proceed.

With respect to the formally named COVID-19, Arizona like Colorado is now allowed to conduct tests locally. AZ, in addition to one case that has fully recovered, has found one new "presumptive positive case" pending confirmation by CDC. Their stated goal is to manage the issue as best as possibly but don't expect to fully contain it. New cases will be asked to self-quarantine themselves at home unless hospitalization is deemed necessary. Roughly 80% of the cases have mild to moderate symptoms and can recover on their own. It's unrealistic to expect the heavy handed strategy that China imposed in this country.

While the travel and conference industry is likely to suffer the most it also seems reasonable to otherwise expect business as usual. Hopefully the changing seasons also helps over the near term. It may be that this virus just become one more thing that becomes a seasonal concern.

[TakeFive]

Originally Posted by bulldurhamer

Life is what happens while you're making other plans. The next day's bounce quickly lost altitude for the remainder of the day.

Even last Friday's bottom and vigorous bounce in the last fifteen minutes couldn't be maintained today.

The negative assumption now is that there will be some amount of economic damage and it's the undetermined amount that continues to make investors nervous. Will probably retest the lows tomorrow; it could go either way.

Below the surface there are many short-sellers that have had no fun for some time. This is their chance to make bank. This also is what makes for increased volatility.

I'm still not expecting any longer term damage but time will tell.

[mhays]

Some misconceptions here.

1. A project intended to start in Q2 is NOTHING like certain. Also, it doesn't have a construction loan. It might have a "commitment," which is a little better from the letter your mortgage banker gives you before you buy a house. The real work comes later. For starters they don't know what the project will cost, or when it can start.

2. Hotel developers and financiers are interested in metrics in 2022 and maybe 2021, not short-term ups and downs. Unless the coronavirus gets far worse than expected, it's seems like a blip we'll be forgetting by then. By 2022 we should have treatments and maybe a vaccine.

[TakeFive]

Originally Posted by mhays

Some misconceptions here.
1. A project intended to start in Q2 is NOTHING like certain. Also, it doesn't have a construction loan. It might have a "commitment," which is a little better from the letter your mortgage banker gives you before you buy a house. The real work comes later. For starters they don't know what the project will cost, or when it can start.

With respect to the WTC project that Jmc84 asked about I suspect that Golub & Company is fully capable of proceeding pending lining up contractors. But they're also smart enough to ask themselves if construction might drop off this year which potentially could make costs more attractive if they waited. They're also smart enough to ask themselves if they'll be able to acquire the needed materials and supplies given the state of things and if there might be price spikes in getting some things which could increase the cost of the project.

The world we currently live in is no longer so simple.

Originally Posted by mhays

Some misconceptions here.
2. Hotel developers and financiers are interested in metrics in 2022 and maybe 2021, not short-term ups and downs. Unless the coronavirus gets far worse than expected, it's seems like a blip we'll be forgetting by then. By 2022 we should have treatments and maybe a vaccine.

Easy for you to say; easier said than done.

https://www.bisnow.com/national/news...ey-need-102885

The U.S. hotel industry reported record-breaking performance numbers last year... Despite these numbers, STR and Tourism Economics, the benchmarking group many lenders use to determine how they should loan to hospitality projects, downgraded its 2020 forecast for U.S. RevPAR growth.
....
However many markets are feeling the effects of new supply coming online, which in some instances is outpacing demand. Also, as the country’s GDP growth slows, RevPAR may start to fall. Some major markets have seen a slip in occupancy, making hoteliers reluctant to raise room rates, furthering the slip in RevPAR.

Like politics everything is local. I suspect at the rate that Denver has been adding rooms that they fit the above description plus there are four additional hotels under construction in downtown.

While the proposed Marriott across from the convention center could logically take the long view as you suggest it's also just as easy to wait. The land isn't going anywhere. Again the potential difficulty of getting needed supplies and materials could easily be a determining factor.

[mhays]

I'm telling you how things work in my industry (aside from uncertainty about the coronavirus).

You're making wild guesses, particularly on the Golub point, where your reasoning is completely devoid of reality.

[bulldurhamer]

Originally Posted by TakeFive

Excellent questions!

The rule of thumb is that once the ink is dry on the construction loan and the money is in the bank, it's gonna get built.

With respect to the WTC office project that one could go either way. Golub and it's Life company equity partner are reasonably conservative and could decide to delay the project but can also afford to take the long view and proceed.

With respect to the formally named COVID-19, Arizona like Colorado is now allowed to conduct tests locally. AZ, in addition to one case that has fully recovered, has found one new "presumptive positive case" pending confirmation by CDC. Their stated goal is to manage the issue as best as possibly but don't expect to fully contain it. New cases will be asked to self-quarantine themselves at home unless hospitalization is deemed necessary. Roughly 80% of the cases have mild to moderate symptoms and can recover on their own. It's unrealistic to expect the heavy handed strategy that China imposed in this country.

While the travel and conference industry is likely to suffer the most it also seems reasonable to otherwise expect business as usual. Hopefully the changing seasons also helps over the near term. It may be that this virus just become one more thing that becomes a seasonal concern.

Turn off the foxnews. Covid19 is going to be devastating in every way possible.

[twister244]

Originally Posted by bulldurhamer

Turn off the foxnews. Covid19 is going to be devastating in every way possible.

The virus will most likely cause a dip in the economy over the next several weeks/months, but I don't see a huge long-term disaster. Rates of infection are beginning to slow in China, and knowledge is starting to accumulate on ways to try to contain it, and folks are working on a vaccine. Definitely short-term pain and changes in lifestyle, but I am not jumping to the "OMG everyone is screwed." boat yet.

[bulldurhamer]

Originally Posted by twister244

The virus will most likely cause a dip in the economy over the next several weeks/months, but I don't see a huge long-term disaster. Rates of infection are beginning to slow in China, and knowledge is starting to accumulate on ways to try to contain it, and folks are working on a vaccine. Definitely short-term pain and changes in lifestyle, but I am not jumping to the "OMG everyone is screwed." boat yet.

You have more faith in our federal leadership than I do. Hope you’re right.

[bunt_q]

Originally Posted by bulldurhamer

You have more faith in our federal leadership than I do. Hope you’re right.

Are you one of those "hope for death and devastation to make Trump look bad" types? It is unclear to me why you think our federal leadership has anything to do with whether this virus kills us all.

Actually, the fact that you think that is exactly why Medicare for All is stupid. There will always be an incompetent administration come along from time to time. Why take a chance with my routine health by putting it in their hands?

[SirLucasTheGreat]

For whatever it is worth, Americans with government health care are more satisfied with their coverage than those with private insurance.

https://news.gallup.com/poll/186527/...satisfied.aspx

In addition, Medicare has controlled costs better than private insurance. I'm actually a capitalist and our current health care system is hardly a perfect example of free market forces. However, I'm also an empiricist and the empirical evidence suggests that single payer systems function better. It is certainly not desirable that we have people in America that might have COVID-19 that are choosing not to go to the hospital for economic reasons.

[laniroj]

Originally Posted by TakeFive

Has anybody tried the new food hall called Broadway Market at 950 Broadway?

Alliance Res (Castle Broadstone) took over the Sport Castle property in July of last year but other than an initial project concept it's been crickets.

The old hot spots that once existed along Speer were torn down for redevelopment. There isn't otherwise any legacy areas for retail-entertainment.

Inside information alert: when Wood priced the Sportscastle project, costs apparently came in higher than their downtown Chicago high rise projects which command 2-3x the rent they'd of gotten at the Sportscastle project. That's how ridiculous Denver costs are right now.

[The Dirt]

What's the difference? Permitting costs?