DENVER | Main Development Thread #7

[TakeFive]

Originally Posted by 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?

Didn't get far b/c of the paywall but with respect to all that wealth... an impressive amount will be doled out to various charities etc. For example one of NPR's largest donors was the McDonald's heiress. Lots is gifted to universities.

No doubt there will be ample money to boost places like Vail/Aspen and other trophy resorts. But on the whole it won't make much difference once it all gets scattered around. Worth noting is that much of inherited wealth will go for productive purposes of one sort or another.

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Well Said

Originally Posted by laniroj

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.

[TakeFive]

The last ten years

Originally Posted by laniroj

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.

Take your pick; either blame Team Obama or blame Millennials.

Why housing affordability keeps getting worse
3/11/2025 By Emily Peck -- Axios

There's an interesting chart of price appreciation with this heading:

"Change in existing home prices since 2015, by price level"

The useful part of this chart shows the cost/price appreciation which started to accelerate middle of 2010's and took off in 2020 when COVID out of the blue had Millennials scrambling to buy homes.

The Emotional Toll of the Great Recession

After Obama was elected but before he was even sworn in, the economy did a quick and deep dive. Is it any wonder that Millennials, the coming of age young adults, now believed that buying a home was NOT such a great idea. With little demand from young adults to buy a home, why on earth would builders build what nobody wanted?

Even in Phoenix where building condos was not a problem, builders opted to build apartments instead. Why? Simply because the demand was strong and making money from building apartments was easy peasy in comparison to building either condos or single family homes.

The problem with data, charts and graphs is that they don't talk, there's no context, so it's easy to miss the Cause and Effect for why things happen.

[mhays]

WOAH WITH THE REVISIONIST HISTORY.

The great recession was due to the housing crash that started in 2007, even if much of the crisis played out in 2008. Obama was elected in 2008. Good lord.

[mr1138]

Originally Posted by mhays

WOAH WITH THE REVISIONIST HISTORY.

The great recession was due to the housing crash that started in 2007, even if much of the crisis played out in 2008. Obama was elected in 2008. Good lord.

For real - it was literally called the "2008 financial crisis" (not 2009). It is widely accepted that the Great Recession began in late 2007.

I usually make a point not to engage with people on this forum who peddle in false facts to support their conclusions. But this untruth is so outrageous it needs to be corrected again.

Obama did not cause the 2008 economic downturn. Full stop. The stock market crashed in September of 2008 following the bankruptcy of Lehman Brothers. The election was two months later - we hold elections in November, and we swear in presidents in January of the following year. Obama arguably won this election largely based on the fact that the American economy was already in free fall. The crash did not begin after he was sworn in and was not the result of any of his policies.

[AHS1983]

The upshot of The Economist article is that inheritance is becoming a bigger factor today than it has been for many decades, across the Western world.

And boomers have an utterly colossal amount to pass on.

[mhays]

I put money on a condo in 2007 and closed in October 2008.

Mortgage financing fell through the floor in October, right after I got mine -- before the election.

[TakeFive]

Originally Posted by mhays

WOAH WITH THE REVISIONIST HISTORY.

The great recession was due to the housing crash that started in 2007, even if much of the crisis played out in 2008. Obama was elected in 2008. Good lord.

Good Lord Almighty... the Obama reference was totally tongue-in-cheek.

I distinctly remember Barack and George collaborating on emergency measures prior to his being sworn in. This collaboration started in December of 2008. I am fully aware of the difference between the initial 'real estate' and 'lender' troubles but my reference was to the stock market meltdown.

BTW, there was no bigger fan of Obama than me. I watched virtually every 'rally' he held and called voters all over the country from a calling system that the campaign had set up. I watched Barack tear up when he announced his grandma had passed in a rainy Virginia and on the night of the election I cried like a baby. If you have been here long enough you should know.... Oh NVM



https://www.reuters.com/news/picture/obama-mourns-grandmother-idJPRTXA8J720081104/

A subdued Barack Obama on Monday mourned his grandmother as a "quiet hero" who helped raise him, telling a campaign rally that her death had made the final night of his White House campaign "bittersweet."

Originally Posted by mr1138

I usually make a point not to engage with people on this forum who peddle in false facts to support their conclusions. But this untruth is so outrageous it needs to be corrected again.

Obama did not cause the 2008 economic downturn. Full stop. The stock market crashed in September of 2008 following the

When I get the facts wrong I will always concede the point b/c I like being accurate and I am wrong from time to time. In this case we're talking about two different 'things' and I'm right on what I'm talking about.

FWIW, I used to hang out at a blog of a previous loan officer that predicted what would happen before the poop hit the fan which is why I sold short the stock of many lenders. While I made some money I 'covered' my positions too soon to make the really big bucks.

Originally Posted by mhays

I put money on a condo in 2007 and closed in October 2008.

Mortgage financing fell through the floor in October, right after I got mine -- before the election.

Yup, that timing fits the scenario...

[mr1138]

Originally Posted by TakeFive

When I get the facts wrong I will always concede the point b/c I like being accurate and I am wrong from time to time. In this case we're talking about two different 'things' and I'm right on what I'm talking about.

Lol. I call big time BS!

To be honest dude - if I see that a forum post has your name on it, I usually skip to the next post and don't even read.

[TakeFive]

Originally Posted by AHS1983

The upshot of The Economist article is that inheritance is becoming a bigger factor today than it has been for many decades, across the Western world.

And boomers have an utterly colossal amount to pass on.

While the argument may be well made it doesn't change my thinking. Much of it goes to economic inflation as to the eye-popping numbers but it will be less impactful IMO than back in the Gilded Age. Of course that was prior to the Great Depression so who knows, eh?

Speaking of the Great Depression reminds me of this classic song

[TakeFive]

Originally Posted by mr1138

Lol. I call big time BS!

To be honest dude - if I see that a forum post has your name on it, I usually skip to the next post and don't even read.

I wonder if you don't confuse a difference of opinion from a difference in facts?

I don't mind reading your posts; free speech is a wonderful thing. That doesn't mean I have to agree with your ideology which is different from non-ideological facts.

[wong21fr]

Originally Posted by TakeFive

While the argument may be well made it doesn't change my thinking. Much of it goes to economic inflation as to the eye-popping numbers but it will be less impactful IMO than back in the Gilded Age. Of course that was prior to the Great Depression so who knows, eh?

Speaking of the Great Depression reminds me of this classic song

The chart is in 2024 real dollars so it's adjusted for inflation. Gilded Age 2.0 is in full swing.

This is off topic, but it was a fascinating article on how inheritance has reestablished itself as a driver of wealth. In 1900, inheritances could be worth as much as 20% of a nations GPD, average looks to be around 15%, with these rates decreasing through the 20th century until the rebounded in the 1980's and now sits at around 10% of GDP on average. Contributing factors include the rebuilding of wealth following WW1 & WW2 (it turn out annihilating Europe twice was a bad idea) and the decrease in estate taxes.

The take-away is that it's more important to marry the estate versus marrying productivity if you want to live comfortably in the current era.

[AHS1983]

Originally Posted by wong21fr

The chart is in 2024 real dollars so it's adjusted for inflation. Gilded Age 2.0 is in full swing.

This is off topic, but it was a fascinating article on how inheritance has reestablished itself as a driver of wealth. In 1900, inheritances could be worth as much as 20% of a nations GPD, average looks to be around 15%, with these rates decreasing through the 20th century until the rebounded in the 1980's and now sits at around 10% of GDP on average. Contributing factors include the rebuilding of wealth following WW1 & WW2 (it turn out annihilating Europe twice was a bad idea) and the decrease in estate taxes.

The take-away is that it's more important to marry the estate versus marrying productivity if you want to live comfortably in the current era.

Thanks for the summary. That in the US, for every $100 an employer pays an employee a dead person pays $20 to an heir is pretty amazing.

[TakeFive]

The Big Picture

CRE Loan Delinquencies Hit Highest Percentage In 10 Years, And The Rate Could Go Higher
March 12, 2025 by Billy Wadsack, Dallas-Fort Worth

Commercial real estate loan delinquencies reached a 10-year high at the end of 2024, and they could continue to grow in the year ahead, according to new Federal Reserve data.

Likely the "Extend and Pretend" strategy will experience more thin ice in 2025.

EXCLUSIVE: 83% Of Multifamily Investors Are Looking To Buy In 2025
March 11, 2025 By Matt Wasielewski, National

Multifamily real estate investors are looking for deals in 2025 as the asset class reckons with last year's supply tsunami and a rolling wave of distress.

Just 2% of multifamily investors plan to cut their portfolios this year, while 83% are looking to make acquisitions, according to a new survey conducted by Berkadia and shared exclusively with Bisnow. It’s the latest sign that capital markets are coming unstuck after spending the last two years frozen by high interest rates and limited pricing visibility.

[TakeFive]

Too Little, Too Late?

Denver is ‘pro-business’ and ‘pro-climate,’ mayor declares as he loosens climate goals for big buildings
Mar. 11, 2025 By Sam Brasch -- Denverite

The owners and operators of Denver’s biggest buildings have spent years demanding breathing room to meet local regulations requiring them to slash energy usage.

Denver Mayor Mike Johnston announced a proposal to loosen the rules, known as Energize Denver, on Tuesday. He said it came after months of negotiations with landlords and property owners, who have long complained the policy added additional economic turmoil to a real estate industry already struggling with rising costs and high vacancy rates.

Aside from hopefully an office to apartment conversion I don't see investors wanting to bother building in Denver.

Pure Speculation

Partly because Peter Navarro (and his boss) is a clueless idiot there's a good chance for supply chain disruptions which quickly leads to escalating costs in a construction environment where it's already hard to make projects pencil. I'll guess there will be little new private sector construction anywhere in the country.

Among the few exceptions would be data centers and chipset fabs. Apple made a splashy announcement which was a virtual repeat of the same announcement made under Biden. It would cover the West Coast, the Sunbelt, with a focus on the RTP in North Carolina.

In Metro Denver new projects are possible in Boulder County or in Lone Tree but unless a REIT which can self-fund wants to build in Denver, look for a quiet, peaceful year or two.

[laniroj]

Originally Posted by TakeFive

...Pure Speculation

Partly because Peter Navarro (and his boss) is a clueless idiot there's a good chance for supply chain disruptions which quickly leads to escalating costs in a construction environment where it's already hard to make projects pencil. I'll guess there will be little new private sector construction anywhere in the country...

I keep hearing people talking about rising construction prices but I don't believe it. We've hit maximum crazy on prices and they are set to fall regardless of tariffs or supply chain issues. There's simply a limit to what someone can pay for something. That old saying "the only thing that fixes inflation is....inflation" is so true. Construction costs have come down a tiny bit, but they are primed to fall further due to anemic demand nationally and internationally. I cannot emphasize how important it is for global industrial pricing that China has hit their demographic wall and is no longer consuming unfathomable amounts of resources. SE Asia is still growing but it's nothing on the scale of what China was doing for 40 years there...

[mhays]

If material prices do rise, some in the industry say it'll simply mean fewer starts, because there's no room for rent/value growth.

We'll see what happens as the tariff wars gain traction, which has only begun.

I do hear that pricing had started to level off pre-tariff due to reduced volumes, but much depended on project/material type -- Biden's infrastructure investments were keeping some categories busy.

The biggest damper on new starts right now might be the uncertainty--whether on office demand, on laboratory demand, on any project that offends trump (anything with bike lanes, clean tech, etc), on material prices/availability, and so on.

[TakeFive]

Originally Posted by laniroj

I keep hearing people talking about rising construction prices but I don't believe it. We've hit maximum crazy on prices and they are set to fall regardless of tariffs or supply chain issues. There's simply a limit to what someone can pay for something. That old saying "the only thing that fixes inflation is....inflation" is so true. Construction costs have come down a tiny bit, but they are primed to fall further due to anemic demand nationally and internationally. I cannot emphasize how important it is for global industrial pricing that China has hit their demographic wall and is no longer consuming unfathomable amounts of resources. SE Asia is still growing but it's nothing on the scale of what China was doing for 40 years there...

On the one hand it's hard to argue with your thinking. OTOH, suppliers won't be so motivated as to take a loss.

Today's NAHB news

The trade group said it has received anecdotal reports from members that Trump’s plan for levies would raise material prices by between $7,500 and $10,000 for the average new single-family home.

While the association is planning a formal survey in the future, this figure offers an early glimpse of what businesses and consumers can expect if Trump’s controversial taxes on Canadian and Mexican imports go forward as planned.

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Originally Posted by mhays

The biggest damper on new starts right now might be the uncertainty--whether on office demand, on laboratory demand, on any project that offends trump (anything with bike lanes, clean tech, etc), on material prices/availability, and so on.

Did you mention bike lanes?

Money/grants allocated but not yet dispersed under the IRA is most vulnerable I'd guess.

[laniroj]

Originally Posted by TakeFive

On the one hand it's hard to argue with your thinking. OTOH, suppliers won't be so motivated as to take a loss.

Today's NAHB news...

The dog wags it's tail, not the other way around. If there is no demand for a product, a seller has no ability to pass on pricing increases. None. They will take a loss. That's the real world and more people need to understand the difference between real world and theory. Business equals risk - take some and you'll see (maybe you already have)!

Are any of the people making these silly predictions in the real world? This is the inflammatory response they, and every other special interest group, have to play to protect against threats, perceived or real. Ask business owners, they'll tell you what's happening right now. Go walk a construction site, there's more workers on any given job than at any point in the past 15 years. The Fed would be wise to cut the interest rate....I've said it many times before...they are usually 6 months too late in their reactionary thinking and we start to suffer 6 months to a year later because of Fed mistakes. The Fed should have dropped the interest rate more last year. It's already too late.

[laniroj]

Has anyone heard anything of the River Mile project start? I'm kind of worried about that one given it had a huge chunk of federal funding for the stream mitigation. Was that already committed and funded and is it safe or could that throw a kink in the program? Anyone with updates?! Love that project and hope to see it build out in the next cycle.

[wong21fr]

Pretty new stadium renderings for the NWSL Denver team, Kroenke might be seething with jealousy:




Denver NWSL team plans to build 14,500-seat stadium, entertainment district at Santa Fe Yards

The city’s National Women’s Soccer League club, which is set to begin play in 2026, plans to build a 14,500-seat stadium at Santa Fe Yards at Broadway and Interstate 25. The club’s formal announcement is set for Tuesday afternoon.

Designed by Populous, it will be the state’s first stadium and entertainment district built specifically for women’s professional sports, and one of the first of its kind in the country.

The stadium, which is slated to open in 2028, will be built on 14 acres of land the city plans to acquire in tandem with the club. The site is located in the northwest quadrant of an approximately 42-acre vacant property in the Baker neighborhood. It will be the metro’s fifth pro sports stadium, joining Coors Field (opened in 1995), Ball Arena (1999), Empower Field (2001) and Dick’s Sporting Goods Park (2007).