DENVER | Main Development Thread #6

[EngiNerd]

Originally Posted by Denver

Even though this is a wasted opportunity, this building will not look nearly as bad with the 12 story office/hotel behind it. Any idea when any of these will break ground?

From RDS/Denver Cityscape "Construction is proposed to start in 2015 with completion in late 2016"

Originally Posted by Fritzdude

Is there a possibility that we could one day see a building over the rails? Or, is this not ever going to happen due to security concerns, etc..

I would highly doubt it unless the economics of it work out, it would be very expensive at this point since you would have to build a temporary structure over the rails to protect it during construction...and sneaking in foundations around all the rails would be a logistics nightmare. In other words, not likely for a very long time, if ever. There are other precedents around the world of this being done, but they are only in very dense areas where space is a premium (I think there is/was a proposal in D.C. and London if i recall).

[mhays]

Basically the savings in land cost needs to overcome the cost of the cover structure, the limitations imposed by the rail owner, and the other inherent disadvantages.

The structure needs to be blast-proof in addition to whatever spans are necessary. Big added cost. Some of that is for potential terrorism but it's also for random oil tank explosions etc.

Since you can't go underground your parking needs to go above-grade. And you have very little space for anything at-grade. Pretty soon it's a giant podium.

Then there's the issue of vibration. You can solve some of that structurally but it can be expensive.

[TakeFive]

Originally Posted by bunt_q

It can be. I preferred 2009 Denver to 2014 Denver. Not that a time machine is an option, but I am not sure I agree that the positives outweigh the negatives. I'd be open to some pretty draconian policy measures to stop us from turning into San Francisco. I'm sorta the anti-bcp in that sense (although I think his libertarian tendencies could do us a lot of good, they'll only work if we can shoot, say, 5 rich white NIMBYs at every public meeting).

Denver is quite different from San Francisco or even Austin which are being heavily driven by tech of late.

I would guess that a lot of money in Denver is energy related and crude oil prices are still cratering and looking for a bottom. Now it's taking the whole market down; markets get nervous, don't like such uncertainty. People start assessing worst case potential scenarios. It's amazing all the various jobs that are tied into the energy industry either directly or indirectly.

When markets start going south then lenders gasp a little; start rechecking their risk in the oil patch. We're not far from the point when Hines would put their tower back on the shelf, considering all the risk they must have in Houston.

Not sure how residential projects might be impacted but there would be some impact certainly. Or things could stabilize soon and many projects would move forward. Hard to predict.

EDIT: Just saw where U.S. Steel is laying off 756 workers due to low oil prices. Forget needing so much pipe. And the fallout is just beginning.

[Scottk]

Oil may be collapsing and that may be a negative thing for Denver, but the stock market is the prettiest girl at the dance, and, from all present indications, may even get prettier in '15. Tons of cash in the world seeking yield. Look what's happening with the Shanghai. Now that real estate, the prime depository of the Chinese savings, is going bust, all that money is buying a crooked market. It will end badly, soon. The smart money is flowing into the west, primarily, S&P. Treasuries are totally bubbled, too. Absurd. VUSTX is up ridiculous in the wrong direction. We still, after a period we should have known, are Japan, in a new, well armed version. The American consumer is toast, and the greatest consuming demographic, the Boomers, are literally dying, basically, bankrupt. That will take time, though. Maybe ten to twenty. Saw this today: http://www.rigzone.com/news/article.asp?a_id=115404 ....... I know, may be simplistic, but, still, the demographics here should not be ignored. Look at real estate. That's a demographic fueled market that will take two decades to clear.

And really, fuck the Saudis in their smelly asses. And Texas, too, Fuck them into the stone ages they deserve.

[bunt_q]

Scott-Jimmy-Carter-K should run for Boulder City Council. It sounds like he's got the 'malaise in America' talking points down cold.

[seventwenty]

Cool reuse project I saw while on the train today. No pics just yet though.

The scope of the [12th and Osage Street] project involves renovating an existing 50,000-square-foot, two-story warehouse and office for new facilities for the Emily Griffith Technical College. Work includes the demolition and complete interior build-out including new walls, flooring, ceilings, and mechanical and electrical systems for new trade classroom spaces. Exterior improvements include a parking lot, site lighting, and landscaping.

[Interzen]

^^^^^^^^^^^^^^^
I put some renderings up a while ago.

Here is a link.

EDIT: Some of the images seem to be broken but if you click on them they will open.

[Interzen]

There is a cool internal Sprocket Design indexed map of RINO development attached to this Confluence artilcle.

I couldn't figure out how to shrink the image so here is a link to the Map

[TakeFive]

Originally Posted by bunt_q

Scott-Jimmy-Carter-K should run for Boulder City Council. It sounds like he's got the 'malaise in America' talking points down cold.

One of the more brilliant propaganda strategies from the right is to accuse the left of doing what they are notorious for. "Malaise in America" - that's good.

Originally Posted by Scottk

Oil may be collapsing and that may be a negative thing for Denver... The American consumer is toast, and the greatest consuming demographic, the Boomers, are literally dying, basically, bankrupt. Saw this today: http://www.rigzone.com/news/article.asp?a_id=115404 ....... I know, may be simplistic, but, still, the demographics here should not be ignored. Look at real estate. That's a demographic fueled market that will take two decades to clear.
.

The piece on RigZone is interesting and yes too simplistic.

Speaking of "energy" I would suggest "we" elders take ourselves too seriously to think the world can't live without us. I'm confident that there will be no shortage of "young and restless" to carry the torch forward. In fact the energy in downtown Denver is a perfect example of that.

For anyone curious about oil production I did find this easy-to-read overview.
Because it's relevant to Colorado and by extension to the downtown Denver office market and with a little effort I found a "jpg" of a great graph which I'll share.

per financialsense.com


It's also good to remember that the U.S. comprises (only) about 25% of the world energy consumption. The average consumer is a direct beneficiary of today's lower gas prices. Think of the savings to the airlines, for example.

[Curtis Park]

Originally Posted by DenverInfill

I'm quite aware of this specific issue. From what I understand, the city recognizes that their parking requirements for mini-storage are out of whack, but the requirement was sort of a carry-over from the old zoning code. I believe they view this case as a way of moving forward in the future on making the change in the code.

Guardian Storage had their hearing yesterday for the zoning variance allowing them to provide fewer parking spaces. They received the variance. Which now will allow them to sell the parking lot across the alley for development.

[bunt_q]

Originally Posted by TakeFive

One of the more brilliant propaganda strategies from the right is to accuse the left of doing what they are notorious for. "Malaise in America" - that's good.

Dude, I'm a liberal. I'm just not a "the world is ending" whiner. I think America is doing fine, I think humanity is doing better than fine, I think the Earth will make it, and I think anybody who says otherwise either has something to gain from doomsaying, they've seen too many zombie flicks, or they just need to get laid. Conservatives do it too, you're right. They do it through fearmongering; liberals do it through whining. I find the former laughable; I find the latter annoying.

Originally Posted by TakeFive

#peakoil

[balugajames]

Originally Posted by TakeFive

It's also good to remember that the U.S. comprises (only) about 25% of the world energy consumption. The average consumer is a direct beneficiary of today's lower gas prices. Think of the savings to the airlines, for example.

Not if they don't have employment. All of the fake growth we have seen in this country since 2008 has been powered by that very graph you reference; however, this fracking boom is about to collapse. I am sure you understand basic economics. Getting 2 dollars for something that costs 5 is not economical. That is what our shale bubble is. Up to 1/3 of recent capital expenditures in the US have been tied, in some way, to the energy sector and its from borrowed money expecting oil prices to stay high. Its bigger than the housing bubble. We are more or less fucked. I hope you all enjoyed the ride. At least we got some towers out of it.

Most drillers are leveraged over 6 to 1 in debt, hoping prices stay high. You will see bankruptcies ignite in the drilling industry. Where do you think all the good paying jobs in the states have come from recently? Do you think they will keep paying?

States without shale have lost over 400,000 jobs while shale states have gained more than 1.3 million since 2008. The shale powered energy boom has masked the real economic outlook which is grim. Lower gas prices below the shale bottom line is NOT GOOD FOR AMERICA! That bottom line is around 80$ a barrel. We are currently sitting at 49$.

I hope I am clear. Get ready for another 08. Look at any market graphs of bonds and oil prices and you will see a very nice corollary to those most recent events we hoped would never return.

It gets worse... Most shale fracking wells lose 90% of their production capacity within the first few years. Production is going to rise in the short term keeping prices down (not good) since we are still drilling, but exploration and permitting has already tanked. If prices stay low, new fracking will cease due to bankruptcies/lack of capital and in a few years we will be out of production, so to speak. I am not saying I support fracking. In fact I believe its short sighted. Not to mention it will leave us with a massive cleanup job; however, I am just relaying the facts. All fracking has done is buy time, but not much.

Peak oil is real, its happening now, but its just playing out a little differently than expected.
#peakoil

I hope you heed my warning. Just make sure you are ready for another downturn, which in my mind, will be worse than 2008. Unless oil prices march back up, which is unlikely given Saudis recent moves and our general economic health, our boom is about to bust. As the economy retracts so will oil demand, keeping prices down, making all these great shale fields we have economically unfeasible.

Its not the end of the world, but its going to suck.
Believe me, I hope I am wrong.

Good luck and happy new year!

[DenverPoke]

^^^ I agree service companies are being hit hard and layoffs are going to happen, some already are. I'm not sure about the economic collapse though. Most companies are hedged thru most of 2015 and some into 2016. It could be a difficult year or 2 but oil prices will rebound to the $80/barrel range where production is economically viable. This downturn is mostly supply/demand driven as opposed to the collapse in 2008, these things tend to work themselves out...in spite of the Saudi's attempts to collapse the market.

[balugajames]

Originally Posted by DenverPoke

^^^ I agree service companies are being hit hard and layoffs are going to happen, some already are. I'm not sure about the economic collapse though. Most companies are hedged thru most of 2015 and some into 2016. It could be a difficult year or 2 but oil prices will rebound to the $80/barrel range where production is economically viable. This downturn is mostly supply/demand driven as opposed to the collapse in 2008, these things tend to work themselves out...in spite of the Saudi's attempts to collapse the market.

I hope your right. Remember, 80$ is an average, many fields are upwards of 100$, 120$, with the lowest around 75$.. That is just 'break even'. Also, most of these drilling companies depend on outside capital for exploration and drilling which is going to be scarce given this outlook. Most, if not all of the small players are currently in debt (6:1, even some as high as 12:1). Sure, the big boys: Shell, BP, ConocoPhillips, Exxon will survive; although, Conoco already announced a reduction in spending by 20% for 2015.

We are not even factoring who is sourcing all this debt which is primarily the central banks... Additionally, derivatives have a possibly huge but unknown play in this unwinding.

To be clear, I am not saying the economy will necessarily 'collapse'. The fracking boom will and with it a retraction to the US economy; similar, but with a larger magnitude than 2008 will likely ensue. However, unlike the 08 crash, we are left with cleanup, not assets. Again, the world will go on, and many will be left, more or less, unaffected as with 2008 (I hope). Yet many will suffer. Its important to point out though that we aren't even talking about other debacles which are poised or already hitting us.

Education, water, Ebola, Geo-politics, US political stalemate, changing weather patterns, US dollar status, ecological collapse, racial/religious tensions, etc..

Don't believe the propoganda machine.

I am just saying. Its going to be rough sailing and this fracking crash is just the second of many waves to come. So buckle up.
But, no zombies..

[DenverPoke]

No doubt there will be some companies totally cleaned out by this. Here are a couple interesting graphs:

[The Dirt]

How old is the second graphic? The price was 48.21 at close yesterday. http://markets.ft.com/research/Markets/Tearsheets/Summary?s=CL.1:NYM

[bcp]

oh the irony...we got good at drilling, and now prices are coming way down...put us in danger of killing what we are good at doing!

there is some pain coming..it's time for a correction (it's been 7 years...). total collapse of energy? nah

[DenverPoke]

Originally Posted by The Dirt

How old is the second graphic? The price was 48.21 at close yesterday. http://markets.ft.com/research/Markets/Tearsheets/Summary?s=CL.1:NYM

I believe that was October 29th. I imagine break-even would still be very similar.

[rds70]

Back to development news:

SkyHouse Denver: The payment kiosks have been removed from the parking lots and the foundation permit has been issued.

7th and Sherman Apartments: The lot has been fenced off and the existing building on the site are coming down.

A building permit application has been submitted for the Alexan Cherry Creek project.

[DenverPoke]

Originally Posted by rds70

Back to development news:

SkyHouse Denver: The payment kiosks have been removed from the parking lots and the foundation permit has been issued.

7th and Sherman Apartments: The lot has been fenced off and the existing building on the site are coming down.

A building permit application has been submitted for the Alexan Cherry Creek project.

Skyhouse...Excellent, I saw where they closed on a $65M loan with JPM in December so I figured it would be starting soon.

This has been listed as Skyhouse I, anybody have knowledge where they intend to clone this guy?