DENVER | Main Development Thread #6

[TakeFive]

It could always be worse.

"Emptiness: Phoenix office vacancy among worst in US"
Feb 23, 2015, 11:36am MST by Mike Sunnucks

That's a little misleading. Tempe has a tight market including the two million Square Feet that State farm is building that's a 100% pre-leased. Well it's their real estate and they're leasing it to themselves so of course it's pre-leased... LOL. Some areas do have high vacancy and a need to re-purpose a lot of that space.


In Denver news, apparently DIA is looking ahead to leaving planes behind and creating a "Virtual Airport." I always get nervous when people want to change my virtual reality. But according to Greg Avery at the DBJ...

The most ambitious technology project out at Denver International Airport has nothing to do with its planes and passengers.

[enjo13]

Originally Posted by Stonemans_rowJ

The individual owner landlord is starting to feel the pinch.

I see no indication to think that is true. Rents are spiking like crazy still. I personally know folks who have seen a $700/month year-over-year rent increase. Those are mostly one-off landlords who own a condo or house that they are renting.

I actually suspect that we're not building nearly enough rental units right now.

[DenverInfill]

Originally Posted by TakeFive

It could always be worse.

"Emptiness: Phoenix office vacancy among worst in US"
Feb 23, 2015, 11:36am MST by Mike Sunnucks

That's a little misleading. Tempe has a tight market including the two million Square Feet that State farm is building that's a 100% pre-leased. Well it's their real estate and they're leasing it to themselves so of course it's pre-leased... LOL. Some areas do have high vacancy and a need to re-purpose a lot of that space.[/URL]

A Tale of Two Cities

Cushman & Wakefield, year end reports for 2014:

Metro-wide Office Vacancy: Phoenix = 21.9%, Denver = 11.5%

Focusing just on the downtown sub-markets:

Phoenix "CBD" (Downtown + Midtown):

Overall vacancy: 23.0%.
Under construction or completed in 2014: 0 sf
Overall Net Absorption in 2014: -86,576

Denver "Urban Core" (CBD + Midtown):

Overall vacancy: 10.8%
Under construction or completed in 2014: 1,162,934 sf
Overall Net Absorption in 2014: 539,128

That's quite an amazing difference between the two cities. Oh, and Denver's average downtown office rental rates are about $9 - $10/sf higher.

http://www.cushmanwakefield.com/~/media/...ix_Americas_MarketBeat_Office_Q42014.pdf
http://www.cushmanwakefield.com/~/media/...er_Americas_MarketBeat_Office_Q42014.pdf

[TakeFive]

Originally Posted by enjo13

I see no indication to think that is true. Rents are spiking like crazy still. I personally know folks who have seen a $700/month year-over-year rent increase. Those are mostly one-off landlords who own a condo or house that they are renting.

I actually suspect that we're not building nearly enough rental units right now.

Posted just today at 7News/thedenverchannel.com
"10 cities with skyrocketing rent"
by Christine DiGangi, Credit.com

I was floored to see this:

3. Denver
Median rent: $1,827
Increase: 10.2 percent

But I suspect that Stoneman's_rowJ is closer to the pending future than is yet-to-be clear at this point.

There is really quite a lot under construction and at different price points. The presumed higher price points would be at SkyHouse, EnV, Platform, 17W and most of the projects in Cherry Creek and others. Presumed lower price points would include Lower Highlands, RiNO, Uptown, South Broadway and others.

I assume there has also been a number of recently completed or in the completion phase units that are now being rented. The area needs way more affordable options but there are some of those being built as well, though scattered around more.

[TakeFive]

Originally Posted by DenverInfill

A Tale of Two Cities

Cushman & Wakefield, year end reports for 2014:

Metro-wide Office Vacancy: Phoenix = 21.9%, Denver = 11.5%

Focusing just on the downtown sub-markets:

Phoenix "CBD" (Downtown + Midtown):

Overall vacancy: 23.0%.
Under construction or completed in 2014: 0 sf
Overall Net Absorption in 2014: -86,576

Denver "Urban Core" (CBD + Midtown):

Overall vacancy: 10.8%
Under construction or completed in 2014: 1,162,934 sf
Overall Net Absorption in 2014: 539,128

That's quite an amazing difference between the two cities. Oh, and Denver's average downtown office rental rates are about $9 - $10/sf higher.

http://www.cushmanwakefield.com/~/media/...ix_Americas_MarketBeat_Office_Q42014.pdf
http://www.cushmanwakefield.com/~/media/...er_Americas_MarketBeat_Office_Q42014.pdf

LOL, Yup.

Though the distortion there is that "Midtown" has buildings (not all) that are 40-60% vacant. And the problem is... you'll love this, that in addition to being dated, there's not enough parking to suit what tech minded companies are looking for with their efficient use of space. That despite the fact that light-rail goes right by their front doors, LOL.

CBD is a much better story. The (2) new towers are leased up for the most part. Older buildings though have more vacancy.

The similar to Cherry Creek/Colorado Blvd. new buildings at the upscale area of 24th Street and Camelback has been a problem for both Midtown and the CBD. LoDo would be reflected in Old Town Scottsdale where several Silicon Valley companies have recently expanded (Camelback and Scottsdale Road).

Downtown Phoenix has always been a bit of a stepchild sadly. On the bright side there is renewed urban interest in historical neighborhoods. Things have improved over the last decade but the pace is slow. Downtown hotels & restaurants did enjoy tripling their income over Super Bowl week. There are other Green Shoots so at least there is optimism within the urban community.

[DenverInfill]

Originally Posted by TakeFive

LOL, Yup.

Though the distortion there is that "Midtown" has buildings (not all) that are 40-60% vacant. And the problem is... you'll love this, that in addition to being dated, there's not enough parking to suit what tech minded companies are looking for with their efficient use of space. That despite the fact that light-rail goes right by their front doors, LOL.

CBD is a much better story. The (2) new towers are leased up for the most part. Older buildings though have more vacancy.

The similar to Cherry Creek/Colorado Blvd. new buildings at the upscale area of 24th Street and Camelback has been a problem for both Midtown and the CBD. LoDo would be reflected in Old Town Scottsdale where several Silicon Valley companies have recently expanded (Camelback and Scottsdale Road).

Downtown Phoenix has always been a bit of a stepchild sadly. On the bright side there is renewed urban interest in historical neighborhoods. Things have improved over the last decade but the pace is slow. Downtown hotels & restaurants did enjoy tripling their income over Super Bowl week. There are other Green Shoots so at least there is optimism within the urban community.

I've been a long-time reader of Jon Talton's Rogue Columnist blog, which is exceptionally well done. He chews on these types of statistics on a regular basis.

[TakeFive]

DenverInfill... Ah hah. I've only read a few of his pieces but I know the reference. While I might agree philosophically, his points are often a bit presumptive or simplistic IMO. But that's the nature of things with a political bias. That said his writing is very good and thought provoking.

There's a guy who moved out from NYC (name escapes me) that bought up many of the old warehouses south of the tracks (literally). It's more RiNo-esque but the good news is that there has been some new stuff finally sprout in the area including a tech incubator.

[DownhomeDenver]

Originally Posted by TakeFive

DenverInfill... Ah hah. I've only read a few of his pieces but I know the reference. While I might agree philosophically, his points are often a bit presumptive or simplistic IMO. But that's the nature of things with a political bias. That said his writing is very good and thought provoking.

There's a guy who moved out from NYC (name escapes me) that bought up many of the old warehouses south of the tracks (literally). It's more RiNo-esque but the good news is that there has been some new stuff finally sprout in the area including a tech incubator.

So I'm just curious...do you live in Phoenix?

[DownhomeDenver]

Transamerica is moving from the tech center to downtown. Pretty nice!

http://www.bizjournals.com/denver/blog/r...-to-1801-california-adding.html?page=all

[seventwenty]

Well downtown Denver's vacant office space just got tighter.

Transamerica Corp. will relocate and expand its Denver presence from the Denver Tech Center to downtown Denver, leasing 121,000 square feet in the 1801 California St. tower that was once home to Qwest.

The move by the Baltimore-based insurance and financial giant, expected in the fourth quarter, will double the size of Transamerica's Denver office and bring the company's local presence to 650 employees.

ETA: Missed being first by a minute. I blame everyone but me.

[The Dirt]

Originally Posted by seventwenty

ETA: Missed being first by a minute. I blame everyone but me.

I blame myself, too.

[DownhomeDenver]

Originally Posted by seventwenty

Well downtown Denver's vacant office space just got tighter.



ETA: Missed being first by a minute. I blame everyone but me.

HAHAH! Sucka!

[comoneymaker]

Would be nicer if they built a new tower downtown. Shoot they should have been a anchor for 1144 15th st

[TakeFive]

Originally Posted by DownhomeDenver

So I'm just curious...do you live in Phoenix?

Affirmative

Originally Posted by seventwenty

Well downtown Denver's vacant office space just got tighter.

That's a nice win for Brookfield. As the article points out (on Pg 2), Brookfield has spent $50 million renovating and updating the property. Seems like they bought the building about a year before the expiration of the original lease by U.S. West/Quest/CenturyLink. The article says they leased the whole building but I thought it was closer to 850,000 Sq. Ft. Regardless, they were only using a modest percentage of the original space when the lease expired.

Just for fun there's this per Wikipedia:

1801 California Street, also known as CenturyLink Tower, is a skyscraper in Denver, Colorado. The building was completed in 1983, and rises 53 floors and 709 feet (216 m) in height.[2] The building stands as the second-tallest building in Denver and Colorado, and as the 111th-tallest building in the United States.

1801 California Street once held the distinction of hosting the brightest high-rise signs in the world, surpassing even the brightly lit high-rise logos found on the skyscrapers of Shanghai and Hong Kong.[1]

[TakeFive]

Politics and politicians drive me flipping nuts at times. DBJ's Ed Sealover has the "news" story HERE.

"Colorado treasurer questions state subsidies for Aurora Gaylord project"

Colorado Treasurer Walker Stapleton has jumped into the ongoing controversy surrounding state incentives awarded to the Gaylord Rockies hotel/conference center in Aurora, asking a high-ranking state official to explain why the Colorado Economic Development Commission awarded a subsidy to the project.

Stapleton's questions — addressed to Fiona Arnold, executive director of the Colorado Office of Economic Development and International Trade in a letter sent Friday — mirror those that have been asked in two lawsuits filed in regard to the project

Can I assume that as a likely 2018 Republican gubernatorial contender, Stapleton wishes to curry favor for would-be backers of his run? (strictly my guess and opinion of course)

I'll be curious to see how this is handled. My guess is that there is no duty to answer all the specific questions which have already been addressed when the decision was made in a 7-2 vote for approval and through the recent court decision. I doubt very much that each of the 7 affirmative votes is required to explain their positions. One of his questions is due to be answered by an Adams County court case where a decision is pending.

What I can assert with great confidence is that Arizona/Phoenix/Mesa would love to jump to the top of Gaylord's priority list. They'd be all over that opportunity like..... They love the tourism dollars that out-of-state visitors bring in. Are you kidding?

[bobg]

Originally Posted by TakeFive

Politics and politicians drive me flipping nuts at times. DBJ's Ed Sealover has the "news" story HERE.

"Colorado treasurer questions state subsidies for Aurora Gaylord project"

Can I assume that as a likely 2018 Republican gubernatorial contender, Stapleton wishes to curry favor for would-be backers of his run? (strictly my guess and opinion of course)

I'll be curious to see how this is handled. My guess is that there is no duty to answer all the specific questions which have already been addressed when the decision was made in a 7-2 vote for approval and through the recent court decision. I doubt very much that each of the 7 affirmative votes is required to explain their positions. One of his questions is due to be answered by an Adams County court case where a decision is pending.

What I can assert with great confidence is that Arizona/Phoenix/Mesa would love to jump to the top of Gaylord's priority list. They'd be all over that opportunity like..... They love the tourism dollars that out-of-state visitors bring in. Are you kidding?

So where do I make my Walker Stapleton 2018 contribution?

[TakeFive]

Originally Posted by bobg

So where do I make my Walker Stapleton 2018 contribution?

Happy to help. THIS should do the trick.

And if Gaylord should decide to pursue the previous tentative deal in Arizona, I'm sure that the City of Mesa, DMB Assoc. and Governor Doug Ducey would be delighted to help. After all, Arizona is well known for their fabulous resort hotels that cater to the corporate and convention crowd. Having recently accommodated the highest rated sporting event in history, the door is always open for doing a deal. In fact, Gaylord would have good company as the State and City of Mesa recently closed and passed through the legislature an incentive package for a $2 billion data and command center for Apple in the same area.

[wong21fr]

Originally Posted by TakeFive

Politics and politicians drive me flipping nuts at times. DBJ's Ed Sealover has the "news" story HERE.

"Colorado treasurer questions state subsidies for Aurora Gaylord project"

Can I assume that as a likely 2018 Republican gubernatorial contender, Stapleton wishes to curry favor for would-be backers of his run? (strictly my guess and opinion of course)

I'll be curious to see how this is handled. My guess is that there is no duty to answer all the specific questions which have already been addressed when the decision was made in a 7-2 vote for approval and through the recent court decision. I doubt very much that each of the 7 affirmative votes is required to explain their positions. One of his questions is due to be answered by an Adams County court case where a decision is pending.

What I can assert with great confidence is that Arizona/Phoenix/Mesa would love to jump to the top of Gaylord's priority list. They'd be all over that opportunity like..... They love the tourism dollars that out-of-state visitors bring in. Are you kidding?

Nah, it's going somewhere:

Judge Rules Against Aurora's Gaylord Rockies Subsidy Plan

An Adams County district judge Tuesday declared as unconstitutional a key part of the city of Aurora's plan to direct $300 million in tax subsidies to the proposed Gaylord Rockies Hotel and Conference Center, saying it violates the Colorado Taxpayers' Bill of Rights (TABOR).
17th Judicial District Judge Ted C. Tow III, ruling in a case challenging the subsidy, said the city violated TABOR's requirement that voters who could reasonably be predicted to pay any proposed increased taxes be allowed to vote them up or down before they can take effect.That wasn't done, the judge ruled.

This is an interesting development because I would like to know if it will effect the way that TIF districts are established in Colorado to fund the infrastructure for new housing development? Could this ruling be applied to any kind of TIF district? If so, that's a nightmare for any new developments in places like Parker, Aurora, Weld, etc. Pretty much anywhere. Hopefully that's not the case.

[TakeFive]

Originally Posted by wong21fr

Nah, it's going somewhere:

Judge Rules Against Aurora's Gaylord Rockies Subsidy Plan


This is an interesting development because I would like to know if it will effect the way that TIF districts are established in Colorado to fund the infrastructure for new housing development? Could this ruling be applied to any kind of TIF district? If so, that's a nightmare for any new developments in places like Parker, Aurora, Weld, etc. Pretty much anywhere. Hopefully that's not the case.

Fascinating! I didn't know if that case had any merit or not but I wondered. Not prone to conspiracies but I wonder if Stapleton had any sense of what was coming and wanted to get out in front of it?

And you raise another very good question which you're good at seeing things, connecting dots. More questions, not enough answers I'd say.

What's interesting is that when ultra-conservative Arizona was dealing with budget issues a few years ago they wanted absolutely nothing to do with any TABOR type of amendments or solutions. When they want to do a deal the red tape gets cuts pretty fast down here.

[EngiNerd]

moved