DENVER | Main Development Thread #7

[AHS1983]

Originally Posted by mhays

Who could've predicted a disorganized shitshow?

Whiplash is a tactic, I guess.

[TakeFive]

Originally Posted by wong21fr

For the Chavez building, the City of Denver seems like a likely acquirer given it's proximity to the other city offices and relatively recent remodel. Plus there's a need for additional parking for the court facilities.

I'll have to mention this to "Linda" who worked in that building ~ 30 years ago.

Originally Posted by laniroj

Had the feds let go of the federal center during any point before 12/31/2022, they could have made a fortune on federal center property. If Lakewood was smart, and I'm not suggesting they are...

Indeed, when Lakewood comes out of their coma they should also consider upzoning the residential area just to the south of the Federal Center Station which is one of the nicest light rail stations in the system.

Although it's not, the Federal Center Station acts like an "end of line" station for those coming down out of the mountains or up from the south. It's also a bus hub.

[TakeFive]

Thinking positively

Originally Posted by mhays

Who could've predicted a disorganized shitshow?

Residential Associations Give Government A 32-Item List Of How To Fix Housing Regulations
March 04, 2025 by Kayla Carmicheal, Deputy Newsletter Editor

The National Multifamily Housing Council and National Apartment Association have been telling the federal government for years that regulation is making housing development too difficult and too expensive. The associations sent a letter to the White House Tuesday asking the government to review 32 federal rules, regulations and programs at 10 agencies to make housing production easier.

Regulation imposed by the government accounts for 40.6% of multifamily building costs, according to a report from the NMHC and National Association of Home Builders, and NAHB found regulations make up 24% of the price of a new single-family home build. "Significant increases in insurance costs, sales and property taxes, payroll costs and other expenses have hampered our ability to deliver the housing America needs," the letter states.

"People' don't stop to think that the rising costs of housing construction begets higher costs for insurance, taxes etc.

BTW, this wouldn't prohibit local governments from adding all manner of rules and regulations but I prefer this being handled at the state and/or city level rather than a one-size-fits-all at the Federal level.

[laniroj]

Originally Posted by wong21fr

That's the most rose-colored take on Lakewood development I've every heard. You'd be lucky to see Lakewood rezone the Federal Center for six stories of multi-use development- just think about the drama that Parcel 1 had over the past decade before Lincoln Properties finally purchased it.

Heck, Lakewood residents are more likely to want to make it a park versus any kind of built environment.

LOL - Yeah I don't disagree with you at all. I'm bullish on the location of the property not the municipality in which it sits! Proximity to the mountains is an amenity that cannot be overrated. Add in the plethora of large parks and park systems in this area and the fact it has relatively high density adjacent to it and it's a pretty compelling site. If only we had big developers in Colorado to tackle something like this - I'm thinking like a Howard Hughes type company. I've always wondered why Colorado seemingly only has such smaller project-focused developers and not the big community developers. Everywhere around the west you see these big companies doing huge investments; they proliferate in Texas, Arizona, Utah, Nevada, California, Oregon, Washington...but not here. Makes no sense.

[laniroj]

Originally Posted by TakeFive

...BTW, this wouldn't prohibit local governments from adding all manner of rules and regulations but I prefer this being handled at the state and/or city level rather than a one-size-fits-all at the Federal level.

I hear this argument all the time, and do spend some time politicking at the state capitol and in local government where this line of thinking is incredibly prevalent. Honestly, I don't understand why people continue to have this opinion. The professionals who deliver housing across the country all scream at the top of their lungs what's preventing them from delivering more housing (and real estate of all types). The data on housing costs is regularly measured, believable, and undeniable. The #1 reason why housing costs are so expensive is local government regulation. Why do people want to continue down this proven (terrible) path?

If your response is (an opinion) that a one size fits all approach doesn't work then in the same sentence you are REQUIRED to say the local government approach doesn't work either because there really aren't any facts to refute what result the local government approach has yielded.

Let me put it this way. From the 1920's to the mid 1980's, local regulations were broad guardrails. Beginning late 1980's, regulations have morphed from broad guardrails to something more like a rough cut path through the middle of the unexplored Amazon rainforest without a mosquito net to protect you from certain death. I do this all day, every single day. Where's the "follow the science" argument in support of the people who do this day in and day out decade after decade? We don't need governments telling us we have to allow people to have dogs in private property. We don't need them to tell us how much stone or how many colors our buildings need to be. We don't need them telling us we have to increase our electrical budget 5% to plan for everyone to have an electric car. We don't need government collecting public art fees for public art that never gets installed. We don't need the government illegally forcing us to give them property for parks without compensation. We don't need government pushing neglected system maintenance and upgrade costs onto private development because they've neglected their infrastructure for 50 years. We don't need local and state government meddling in generally accepted building codes with dozens of pet-project or reactionary amendments that drive an incredible amount of unnecessary building cost. It's so obvious to those of us who do this for a living what the problems are, but people (like you) just don't seem to believe us and seem to be ok with the status quo which is having a DISASTROUS affect on the American middle and lower economic classes. I do not understand this complacency.

The main issue I see with local government concern is job protection. If we were to take much of the regulation burden out of local government, that's a WHOLE LOTTA PEOPLE who Musk would be firing - they're scared. Imagine if all those people went from restricting development to contributing to it? It's a vision of a country that's much more appealing to me than the proven losing method we've been pursuing for 40 years.

[TakeFive]

"Talking past each other"

means when two people are seemingly having a conversation but are actually discussing different topics or interpretations of the same topic, without realizing it, leading to misunderstanding and a lack of effective communication; essentially, they are not truly connecting on the same level despite speaking at the same time.

Originally Posted by laniroj

The professionals who deliver housing across the country all scream at the top of their lungs what's preventing them from delivering more housing (and real estate of all types). The data on housing costs is regularly measured, believable, and undeniable.

Could I correctly assume that getting rid of Federal regulations that contributes up to 40% of the cost of construction would be a good thing?

By deduction the same would apply at the local level, would it not?

Originally Posted by laniroj

If your response is (an opinion) that a one size fits all approach doesn't work then in the same sentence you are REQUIRED to say the local government approach doesn't work either because there really aren't any facts to refute what result the local government approach has yielded.

I can't agree with this but admittedly I can't point to the information necessary to confirm my supposition. But I'm gonna guess that what works (or doesn't) in the Quad Cities might be both similar and different from what works (or doesn't) in Ogden Utah. Or on a local level what works for Scottsdale isn't the same as what works for Phoenix because each city has/had different objectives.

With respect to the City of Denver, everybody talks about affordability lacking including the Denver City Council. Then the DCC creates all sorts of rules and regs that make housing (and everything else) LESS affordable.

When it comes to making housing more affordable there are many factors. Cost of construction and cost of land are two biggies. Cost of land goes to "desirability" which is one of the key components. Housing in less desirable areas tends to cost less. Eh, amazing. Desirability also keeps demand high; higher demand means higher prices. And so it goes.

[TakeFive]

With Vacancies On The Rise, RiNo Searches For Solutions
March 02, 2025 by Jonathan Rose, Denver

The River North Art District, a magnet for the young, artistic and entrepreneurial, is facing serious distress, with hundreds of thousands of feet of vacant retail and a past year of low absorption. The RiNo Business Improvement District and landlords are working to reverse that trend. But with rising rents, shifting foot traffic and creatives leaving for more affordable markets, the question remains: Will it be enough?

“At a high level, retail likes to be around retail,” Edens Managing Director Thomas Picarsic told Bisnow in an interview. Edens owns several properties in RiNo, including Denver Central Market. Its strategy centers on connectivity, knitting together individual retail spaces to create a sense of place. That means leasing ground-floor spaces and making sure those businesses feed off one another.

Breweries, once a pillar of RiNo’s creative and cultural scene, have been among the hardest hit businesses. Citing rising rents and declining foot traffic, 14er Brewing and Beer Garden closed in late 2024, the latest in a string of brewery closures in the district. Winemaker Infinite Monkey Theorem also closed around the same time.

RiNo will presumably do fine over time because of the popularity overall of the neighborhood. Still the challenges of being able to 'make it' in Denver have become too much for too many.

I do get this growing sense and new data suggests much the same that the consumer is finally rolling over.

Retail in recent years, with last year being a high point has done exceptionally well overall (in the suburbs). I suspect last year was indeed the peak and over the next couple of years will head south. How significant remains to be seen.

[AHS1983]

U.S. Small Business Administration is moving out of Denver because it’s a “sanctuary city” | The Colorado Sun

https://coloradosun.com/2025/03/06/sba-is-moving-out-of-denver-because-its-a-sanctuary-city

[TakeFive]

Two new office leases signed at Denver’s Paradigm River North
March 6, 2025 By Jessica Alvarado Gamez -- Denver Post

Jordon Perlmutter & Co. and Rockefeller Group announced on Wednesday the signing of two new leases at Paradigm River North, a newly constructed eight-story office building in Denver’s RiNo Art District.

Langan Engineering & Environmental Services, a consulting firm that provides a mix of geotechnical, environmental and site/civil engineering services, has signed a lease for approximately 5,307 square feet, while Rockefeller Group, which is a co-developer of the building, has secured nearly 6,000 square feet for its Rocky Mountain Region headquarters.

The two companies are now joining anchor tenant Davis Graham, which moved into its 80,000-square-foot space in December 2024.

Paradigm River North


Photo courtesy Ian Warren

[TakeFive]

Originally Posted by AHS1983

U.S. Small Business Administration is moving out of Denver because it’s a “sanctuary city” | The Colorado Sun

https://coloradosun.com/2025/03/06/sba-is-moving-out-of-denver-because-its-a-sanctuary-city

They have a reported 9 employees which couldn't need much space so how much does DOGE save? Millions of $'s they'll claim? Still I won't believe they leave until they do.

[AHS1983]

Originally Posted by TakeFive

They have a reported 9 employees which couldn't need much space so how much does DOGE save? Millions of $'s they'll claim? Still I won't believe they leave until they do.

I agree. There's an awful lot of rubberbanding going on.

[TakeFive]

Call today to receive up to 8 weeks free!!

Note: No Availability -- but don't sleep on this opportunity because one of these days.....


The Vixen -- 1150 E Colfax


Courtesy Kairoi Residential

[TakeFive]

From High-rise to Mid-rise

Downtown law firm moving closer to Union Station
March 10, 2025 By Matt Geiger -- BusinessDen

Union Station is adding a new law firm to its office docket. Jackson Lewis, a labor and employment law firm, told BusinessDen it's moving to new digs on the ninth floor of 1400 Wewatta St. in a 17,400-square-foot office

From the 26th floor of Hines' 950 17th Street to a lower altitude in an Opus Group project at 1400 Wewatta St. completed in Dec. 2008.

1400 Wewatta


Courtesy Opus Group

[laniroj]

Originally Posted by TakeFive

Call today to receive up to 8 weeks free!!

Note: No Availability -- but don't sleep on this opportunity because one of these days.....


The Vixen -- 1150 E Colfax


Courtesy Kairoi Residential

This is the kind of broken up massing I wish we could see more of. I also wish the City would incentivize this type of massing somewhere. They do incentivize the point tower stuff (wrong) but this kind of massing in the 5-10 story range is much more doable and the city could actually move the needle both on unit production (more density via bonuses) and in the architectural quality by avoiding the cruise ships we see everywhere. It's a win win win.

[laniroj]

Originally Posted by TakeFive

"Talking past each other"

means when two people are seemingly having a conversation but are actually discussing different topics or interpretations of the same topic, without realizing it, leading to misunderstanding and a lack of effective communication; essentially, they are not truly connecting on the same level despite speaking at the same time.

Could I correctly assume that getting rid of Federal regulations that contributes up to 40% of the cost of construction would be a good thing?

By deduction the same would apply at the local level, would it not?


I can't agree with this but admittedly I can't point to the information necessary to confirm my supposition. But I'm gonna guess that what works (or doesn't) in the Quad Cities might be both similar and different from what works (or doesn't) in Ogden Utah. Or on a local level what works for Scottsdale isn't the same as what works for Phoenix because each city has/had different objectives.

With respect to the City of Denver, everybody talks about affordability lacking including the Denver City Council. Then the DCC creates all sorts of rules and regs that make housing (and everything else) LESS affordable.

When it comes to making housing more affordable there are many factors. Cost of construction and cost of land are two biggies. Cost of land goes to "desirability" which is one of the key components. Housing in less desirable areas tends to cost less. Eh, amazing. Desirability also keeps demand high; higher demand means higher prices. And so it goes.

I don't think we're speaking past each other. What I'm saying is I don't much care what local municipalities have to say anymore and if anyone under the age of 40 does, I hope they wake up soon. Local municipalities have been getting this wrong for 40 years and in doing so, they are significantly decreasing the quality of life for all generations following X'ers. The boomers and X'ers have created this housing disaster and I'm not sure most people understand what a conundrum we, as a nation, are in from a housing cost perspective.

I'll put it into perspective for you. If we were to build housing at the fastest historical pace on record for three years in a row, it would still barely make a dent in the cost of housing. Imagine 2024 delivery levels x2 (adjusted for population growth) for three years. Would housing costs fall moderately in the short term? Yeah, absolutely - maybe 10-15%. Would they fall to a historical level of affordability that boomers and X'ers generally enjoyed relative to income and interest rates? Nope.

My position is government at all levels have been regulating the hell out of our built environment and it's been detrimental to the American experience overall. It's way past time for a significant course correction. I've advocated for it before and I'll do it again...the feds should withhold federal funding of all types to local municipalities who don't ease the regulatory burden.

Fun fact - local permitting, planning, impact, etc types of fees add approximately 10% to the total cost of a project (low end estimate). Simply removing that cost burden could bring down the cost of occupancy of all types. Here's the math:

300 unit project costs $100,000,000 for round math. Take $10 million out of costs and your 8% required return on cost for the two comparable projects is $8mm and $7.2mm. That $800,000 delta on 300 units equates to $222 per month in lower rent (for condos, if we built them, it would be a bit less than this since interest rates are a bit lower).

[AHS1983]

Boomers are sitting on $82 trillion in wealth, with a lot in their real estate holdings.

Those properties will be passed on in the next < 20 years, as will all their other wealth.

What will that do to housing?

[TakeFive]

While you are right on the one hand; otoh you neglect the most powerful influence that is the "Market Driven" component

Originally Posted by laniroj

My position is government at all levels have been regulating the hell out of our built environment and it's been detrimental to the American experience overall. It's way past time for a significant course correction. I've advocated for it before and I'll do it again...the feds should withhold federal funding of all types to local municipalities who don't ease the regulatory burden.

Fun fact - local permitting, planning, impact, etc types of fees add approximately 10% to the total cost of a project (low end estimate). Simply removing that cost burden could bring down the cost of occupancy of all types. Here's the math:

No doubt over-regulation is bad in many ways and ultimately for affordability. We should acknowledge that not all regulation is bad though.

Upon Review - at at the risk of repeating myself:

The Great Recession/Financial Crisis was really nasty, kind of like the 'day the world changed' forever.

Historically, a surge in starter home development is what helped bring the economy out of recessions previously - but not this time. The other piece was "urbanism" became popular pretty much everywhere even if it looked different in different places. Overnight and over the next decade we have become a "Renter Nation" especially focused on urban centers.

There was NO (or very little) demand for new starter homes 'out in the suburbs' so builders built to the demand for move-up and/or luxury housing. When referring to a housing shortage the biggest imbalance is with single-family homes. That means sprawl other than for infill lots being available; but most infill became the target for multifamily and not so much single family homes. A footnote is that despite the 'crisis' land prices dropped little if any because land was largely controlled by 'land bankers' with no motivation to sell at discounted prices.

Such market driven 'events' are way more powerful than simplistic supply/demand analysis.

[laniroj]

Originally Posted by TakeFive

...There was NO (or very little) demand for new starter homes 'out in the suburbs' so builders built to the demand for move-up and/or luxury housing. When referring to a housing shortage the biggest imbalance is with single-family homes. That means sprawl other than for infill lots being available; but most infill became the target for multifamily and not so much single family homes. A footnote is that despite the 'crisis' land prices dropped little if any because land was largely controlled by 'land bankers' with no motivation to sell at discounted prices.

Such market driven 'events' are way more powerful than simplistic supply/demand analysis.

Simplistic, not quite. The Great Recession created a gaping chasm in the land development market. Land bankers don't deliver lots, they simply buy and sit waiting for the horizontal developers. Prior to the great recession, homebuilders developed land themselves. So many of them got caught in the great recession they dropped land development entirely. Most still haven't picked it back up almost two decades later. The great recession also took out nearly every single pure land developer...they came back at a snail's pace post great recession and quite honestly remain a snail's pace from every metric comparing to historic norms.

Yes those market driven events have huge effects but at this point, the biggest driver is regulation, zoning, cost of materials, cost of labor. Two of these things can profoundly decrease the cost of our built environment. The other two, materials/labor, are much harder. China no longer growing and building ghost cities will be good news for material prices over the next two decades. We're totally screwed on labor.

[DenvertoLA]

Last night I visited "sorry gorgeous", the rooftop bar at the new Novel apartment building on Walnut Street. It has my favorite view of the city for now. If you haven't been, go check it out. I think the end of Walnut Street once fully built out will be a hot spot of activity.

[TakeFive]

Originally Posted by DenvertoLA

Last night I visited "sorry gorgeous", the rooftop bar at the new Novel apartment building on Walnut Street. It has my favorite view of the city for now. If you haven't been, go check it out. I think the end of Walnut Street once fully built out will be a hot spot of activity.

Very Impressive !








Images courtesy NOVEL RiNo/Sorry Gorgeous