DENVER | Main Development Thread #7

[Arapahoe]

Another win for Arapahoe Sq in the news! (although technically right outside the border)
GlobeSt published an article about Riverside Investment moving forward with 1900 Lawrence

“There is a shortage of ‘high performance’ office buildings in Denver, and the pandemic has further tempered new supply,” says Roupp. “Even in the face of COVID-19, new construction assets in Denver continue to lease. 1900 Lawrence is targeting forward-thinking companies who believe that the pandemic will be resolved by the time the building delivers in first quarter 2024.”

The tower will support a broad range of users, including technology firms, law firms, financial services firms and corporate tenants. “The genesis of this design, and the core of our thesis, is to help companies attract and retain talent,” says Roupp.

Breaking ground in Q2!



https://www.globest.com/2021/09/02/demand-supports-speculative-office-development-in-denver/

[TakeFive]

Originally Posted by Arapahoe

Another win for Arapahoe Sq in the news! (although technically right outside the border)
GlobeSt published an article about Riverside Investment moving forward with 1900 Lawrence
Breaking ground in Q2!

https://www.globest.com/2021/09/02/demand-supports-speculative-office-development-in-denver/

Can't remember the last time I read something from GlobeSt.

First question that came up is who is Convexity Properties? Turns out they were co-developer of the 1.5 million sq. ft. BMO Tower in Chicago. From December 2019.

https://www.chicagotribune.com/columns/r...04-orujnax3bvf7zlwkffvow3as7u-story.html

Work is set to begin this month on a 1.5 million-square-foot office tower alongside Union Station, after the developers landed a $476 million construction loan.

Riverside is developing the 50-story office tower with another Chicago-based developer, Convexity Properties, which is the real estate investment arm of trader Don Wilson’s DRW Holdings.

Just curious? Where did all the funding come from for such a large project?

The loan is from BMO Harris Bank, Bank of America and Citizens Bank, O’Donnell said Wednesday. Another investor in the tower is AustralianSuper, a massive pension fund based in Melbourne.

I'm sure that on this project it helped to have a large tenant in your bag.

BMO Harris’ parent company, Toronto-based BMO Financial Group, is the namesake tenant after leasing almost 500,000 square feet in a planned consolidation of downtown Chicago offices.

Taking the precautionary position of mhays, a lot can happen between now and 2nd quarter of 2022 and it's not for real until ground is broken. On the positive side 1900 Lawrence is less than half the size of the BMO Tower.

[laniroj]

Originally Posted by gopokes21

Filtering would still not make housing affordable to people on part-time hourly wages or disability SSI income (like $1,000/mo). It also ignores that most people in an experience of homelessness aren't able to work, and especially not FTE.

I'm not so sure it is that complicated. Utah built houses and housed the homeless. They damn near eliminated homelessness. The missing link was the service side pertaining to mental health, drug/alcohol addiction, etc. As soon as the homeless they housed moved on from their housing programs, they fell right back into homelessness. That said, SLC's problem is drastically reduced compared to Denver and nearly unnoticeable.

With as much money as we spend in Denver metro (moreso CCD to be fair) we could afford to build tons of houses, but it would put an entire industry out of work (I won't call it a cottage industry because it's very important and noble work, but it's become reminiscent of a cottage industry in so many ways).

Some people just can't make it work in life. It's always been that way but we used to have publicly funded and private homes for them to live somewhat respectably, albeit with massive systemic abuse issues. We also used to be able to commit the folks who couldn't figure out life, which we can no longer do. Politics/ethics aside, not having this option is an important factor in the discussion.

One thing is for certain: more housing and more affordably priced housing would ABSOLUTELY have the effect of less people falling into habitual homelessness.

[laniroj]

Originally Posted by TakeFive

I'll be curious to see how this ends up but at the least it is fascinating the level of interest out there.

LOL (how many more OL's can I add?) - 95% financing. This one statement alone makes me believe this project has absolutely zero chance of happening. 2006 anyone?!?!?

[Arapahoe]

Originally Posted by laniroj

LOL (how many more OL's can I add?) - 95% financing. This one statement alone makes me believe this project has absolutely zero chance of happening. 2006 anyone?!?!?

When banks don't require giant sums of cash equity upfront it makes it easier, not harder, for developments to move forward. Just think back to the financial crisis of 2008.

Originally Posted by TakeFive

Taking the precautionary position of mhays, a lot can happen between now and 2nd quarter of 2022 and it's not for real until ground is broken. On the positive side 1900 Lawrence is less than half the size of the BMO Tower.

I hear ya on that one!

[TakeFive]

Side Pocket Construction and Story Time

Mile High Place
1586 Hooker Street






All photos courtesy Highland Builders

Just kids really, it turns out a couple of friends who finished getting an MBA together decided to go into business of investing in real estate.

https://www.bizjournals.com/denver/news/...s-denver-mile-high-opportunity-zone.html

Cohen Rojas Capital Partners, a privately held real estate investment firm based in San Francisco, has made no secret of its affinity for Denver, buying up several small and mid-sized apartment properties here in the span of a few months.

In late August, a fund managed by the firm closed on the $17.5 million purchase of Mile High Place, a 60-unit apartment project that’s currently under construction in the West Colfax neighborhood. The deal marked the fifth local purchase for Cohen Rojas since early 2020, and its first in a Denver-area opportunity zone, which will allow investors in the fund to take advantage of tax benefits created by the Tax Cuts and Jobs Act of 2017.

So how did these kids get their start?

Soon after earning their MBAs in 2009, Cohen and Rojas began buying up single-family rental homes in the Sacramento area. They eventually shifted their focus to multifamily investments, first in Sacramento and later in the San Francisco area and Boise, Idaho.

So you like Denver, eh?

“We haven't bought anything in any markets other than Denver, of late,” Cohen told Denver Business Journal. “It is our favorite market right now. We're open to other opportunities, but we've found more attractive opportunities in Denver than anywhere else thus far this year.”

“Boise rents have really accelerated, and now it's gotten to this point where there is not much of a spread in the rents between Denver and Boise. And to me, that doesn't feel right,” Cohen said. “So we've been more focused on buying in Denver.”

Maybe it's just me but I think this is a fun story. These guys presumably found investors from San Francisco and while Carmel Partners is doing the Big Deals these guys focus on small and mid-size deals. They've paid between $6 million and $20 million for properties generally in central Denver.

[Arapahoe]

Originally Posted by laniroj

Those steel trusses look to be temporary and holding up steel decking. Looks like it is still a cast in place concrete structure, they're just using steel decking to pour. They might be going for an exposed ceiling with a ribbed finish on the underside (like the old buildings)? Hard to tell from the pics...

This was the correct answer from laniroj.

These are called truss table forms and do not include precast slabs. (and now thinking about it, the tower crane as configured could not hoist a concrete slab of this size).

If you are a construction geek, this video provides more information.
https://www.youtube.com/watch?v=8e3sL5Ew8Eg

[TakeFive]

Source

Housing & Construction Costs; ADU's; Politics & Free Markets

Not familiar with Desiree Mathurin/Denverite but she has a well-written piece and update on the state of ADU's in Denver.

https://denverite.com/2021/09/03/denver-adus-how-much-do-they-cost-and-other-questions/

For example, Eric Dahm, a 53-year-old Globeville resident whose home was built in 1911, wants to build an ADU for his 83-year-old father. Dahm said later in life, he could see himself renting it out at an affordable rate or giving the space to his now 22-year-old son.

Extra space for relatives? Check. A possible source of additional income? Check.

Should be an economically-friendly way to create housing, No?

“The pandemic has increased the cost of materials,” Senderhauf said. Dahm, who’s working with Senderhauf on his ADU, said he was initially quoted around $280,000. After he received the permits, that cost went up to $350,000.

Consider that when building an ADU there's no need to purchase any land.

Trumpism & MAGA - Just making observations here

It's no secret (in hindsight) that largely b/c Dems tend to obsess over skin color, this made it easy for Trump to appeal to rural and evangelical white voters and non-voters. Non-voters are NOT considered likely voters by pollsters. Except Trump turned non-voters into voters. Maybe some day skin color won't matter? That's my dream.

MAGA impact on housing costs

In order to fulfill campaign promises Trump instituted a bunch of stupid (IMO) tariffs which appealed to the blue-collar home team crowd. Biden is in a bind. He can't remove tariffs for fear of having no chance with the blue-collar - Union Crowd. BTW, the conservative Tax Foundation was NOT in favor of these tariffs.

No more free lunch from free markets

Thinking especially of costs for steel, aluminum and lumber, between tariffs and the Pandemic supply disruptions costs have gone crazy. So it now costs $350,000 to build a plain vanilla with nice appliances ADU? Tariffs and Union-imposed costs of labor may make for good politics; it's hard for me to complain about the costs from hard-hat labor whether at steel mills or at a new home site but it's also fair to say We All pay a share of higher costs and they can add up fast.

Is the current cost of a house in Denver all that different from the cost of replacement, considering the increasing costs for materials and labor?

Land costs, desirability and zoning

Take a look at prices for new construction in the metro area to appreciate the value of land and desirability differences between say central & SE Denver and Commerce City - North Aurora. Zoning is virtually irrelevant. The key component is desirability since desirability also impacts land costs. Maybe consider turning central Denver into a toxic waste dump? That would impact desirability.

[Ndj]

Happy to see Evolve Towers is moving forward but I have a feeling value engineering is not going to be kind to that concept.

[Robert.hampton]

https://denver.cbslocal.com/2021/09/07/denver-shut-down-civic-center-park-safety-sanitation/

City shutting down civic center because it has become a literal shit hole.

I have mentioned before that it would be incredible to have a vision to turn civic center into Denver's version of millennium park -- and would really do a lot for the city by enhancing the experience at the intersection of the 16th street mall, the capitol, and the art museum/library/golden triangle. Civic Center should be the cultural lifeblood of Denver where business, arts, and politics all converge. Instead its the shittiest part of town that people try to circumnavigate getting from one location to the next (I understand millennium park was similar before its renovation in Chicago).

I would venture to guess the bond package would be far more likely to pass if it included $190 million to transform civic center instead of $190 million towards the national western complex that no one seems to want. Too bad between the mayors office and city council we have a bunch of visionless chumps who can't agree on whether or not we should actually clean up poop and needles off the sidewalk or not. RTD also has a fair share of the blame here for their awful Civic Center renovation that continues to leave that vacant hell strip along Colfax/Broadway (and their successful efforts to implode the bid for the medal of honor museum).

[RyanD]

Originally Posted by Ndj

Happy to see Evolve Towers is moving forward but I have a feeling value engineering is not going to be kind to that concept.

Hard to change it when it has to go through design review.

[Ndj]

Originally Posted by RyanD

Hard to change it when it has to go through design review.

Yeah but the new renders are already a significant downgrade to my eyes. With renders tending to be the most charitable version of reality, I don't have super high hopes for the final outcome.

[laniroj]

Originally Posted by Arapahoe

When banks don't require giant sums of cash equity upfront it makes it easier, not harder, for developments to move forward. Just think back to the financial crisis of 2008....

In theory you are correct. In reality, the fact someone is getting (or thinks they will get) 95% financing for a luxury multifamily rental is worrisome because either 1) they are getting it and it's a sure sign we're all going belly up very soon or 2) they are so inexperienced a developer that they felt making that public statement was a good idea which doesn't lend much credibility to this project moving forward (at least with this sponsor/developer). Hell, let's just bring back stated income loans for unemployed folks if we're handing out 95% financing to developers!

[Arapahoe]

Originally Posted by Ndj

Yeah but the new renders are already a significant downgrade to my eyes. With renders tending to be the most charitable version of reality, I don't have super high hopes for the final outcome.

I think this is really a confusion on viewing angles. The new render that Ryan posted on DenverInfill is a vantage looking northeast, whereas, the original render was a vantage looking northwest. Here they are for reference in the approved site development plan:

Orignal render from Northwest (still the current design!)


New render from Northeast (same building!)

[Ndj]

Ah that very well could be it.

[bunt_q]

Originally Posted by TakeFive

The key component is desirability since desirability also impacts land costs. Maybe consider turning central Denver into a toxic waste dump? That would impact desirability.

Originally Posted by Robert.hampton

https://denver.cbslocal.com/2021/09/07/denver-shut-down-civic-center-park-safety-sanitation/

City shutting down civic center because it has become a literal shit hole.

The City working hard to make TakeFive seem downright prescient.

I just assume we are on our way to some Denver-sanctioned version of the Purge. This just gives them time to install the livestream media infrastructure we'll need, since I assume Civic Center will serve as a sort of center stage for the action.

[bunt_q]

Originally Posted by Robert.hampton

I would venture to guess the bond package would be far more likely to pass if it included $190 million to transform civic center instead of $190 million towards the national western complex that no one seems to want.

I'm not sure I agree. I am not sure that a majority of Denver residents care if we abandon core Downtown permanently, in favor of a slightly less urban lifestyle on the fringes of Downtown (Highlands, RiNo, South Broadway, all fit the bill - that's where the action is). Especially in a remote-work post-COVID world, is there any need for Civic Center anymore, or is its best function to contain that scene? On the other hand, central (but not too central) playgrounds, like what the National Western Center could become, are exactly what a future City might need. We did a lot of that crap in the 60s, 70s, and 80s - self-contained, not-at-all-organic, entertainment districts - and they worked just fine. If you believe we are moving into a different phase of urban development in America - a phase of live-work in an environment that is dense enough to support neighborhood-feeling amenities, allow you to drive, and still be in contact with your fellow man, albeit in a fairly controlled environment (think LoHi), then I think National Western Center might be a good step in the direction Denver (and the Denver metro more broadly) are heading.

If you believe Downtown as we knew it is dead. Not saying I do. But I am saying I do not think Civic Center could get any more votes citywide than the National Western Center will. If it was that important to people, closing it for two months wouldn't be some passing headline.

[TakeFive]

Circle September 23rd, 5:30 - 7:00 PM on your calendar

Originally Posted by Robert.hampton

I have mentioned before that it would be incredible to have a vision to turn civic center into Denver's version of millennium park -- and would really do a lot for the city by enhancing the experience at the intersection of the 16th street mall, the capitol, and the art museum/library/golden triangle. Civic Center should be the cultural lifeblood of Denver where business, arts, and politics all converge. Instead its the shittiest part of town that people try to circumnavigate getting from one location to the next (I understand millennium park was similar before its renovation in Chicago).

https://denvergov.org/Government/Agencie...lanning-Development/The-Outdoor-Downtown

Public Workshop 3 | Sept. 23, 2021

Please join the final public workshop where you can review the preferred concept designs and provide feedback.

The workshop flyer is HERE.
HERE is a review of Workshop 2.

The Good News
is that lots of civic-minded people put their heads together toward the neglected needs of the Civic Center and as a result many projects were planned and paid for through the Better Denver Bond passed in 2007.

http://coloradopreservation.org/programs...gered-places-archives/civic-center-park/

In 2009, the city began a $9 million dollar rehabilitation project with funding from the “Better Denver Bond Program”, which followed the 2005 Civic Center Master Plan and supplemental 2009 design guidelines approved by the Denver Landmark Preservation Commission.

Restoration projects included re-establishing original walks, paths, and red oak grovs, rehabilitating the Greek Theater, Voorhies Memorial and Broadway terrace, and restoring Bennett’s original granite balustrade. The results are nothing short of remarkable

DenverInfill also followed many of these projects.


Source

[Robert.hampton]

Originally Posted by bunt_q

I'm not sure I agree. I am not sure that a majority of Denver residents care if we abandon core Downtown permanently, in favor of a slightly less urban lifestyle on the fringes of Downtown (Highlands, RiNo, South Broadway, all fit the bill - that's where the action is). Especially in a remote-work post-COVID world, is there any need for Civic Center anymore, or is its best function to contain that scene? On the other hand, central (but not too central) playgrounds, like what the National Western Center could become, are exactly what a future City might need. We did a lot of that crap in the 60s, 70s, and 80s - self-contained, not-at-all-organic, entertainment districts - and they worked just fine. If you believe we are moving into a different phase of urban development in America - a phase of live-work in an environment that is dense enough to support neighborhood-feeling amenities, allow you to drive, and still be in contact with your fellow man, albeit in a fairly controlled environment (think LoHi), then I think National Western Center might be a good step in the direction Denver (and the Denver metro more broadly) are heading.

If you believe Downtown as we knew it is dead. Not saying I do. But I am saying I do not think Civic Center could get any more votes citywide than the National Western Center will. If it was that important to people, closing it for two months wouldn't be some passing headline.

I think your average voter sees national western as a solution to a problem/opportunity that doesn’t exist. The mayor says ‘hey don’t you really need a place to serve the role that the Denver coliseum played for 50 years?!’ And nearly everyone roles their eyes and says ‘no I don’t need to go watch monster truck shows and I can still do that at the Denver coliseum’. I mean the pitch for national western really, really sucks.

Civic center park by contrast everyone is a problem that I think most people believe needs to be fixed if Denver wants to be a world class city. It’s hard to take pride on your city with the capital/civic center/library in its current condition. And if you tell everyone ‘we’re going to turn this place into the next Millenium park and make it a destination just like we did with union station’ anyone who has ever been to Millenium park or union station would say ‘shit yeah I would love that in Denver, especially replacing that rat hole’.

[wong21fr]

Originally Posted by Robert.hampton

Civic center park by contrast everyone is a problem that I think most people believe needs to be fixed if Denver wants to be a world class city. It’s hard to take pride on your city with the capital/civic center/library in its current condition. And if you tell everyone ‘we’re going to turn this place into the next Millenium park and make it a destination just like we did with union station’ anyone who has ever been to Millenium park or union station would say ‘shit yeah I would love that in Denver, especially replacing that rat hole’.

Yeah. Don’t see the current batch of woke council members pushing that vision it’s just like the Stock Show- a ploy for the evil developers to destroy old Denver (or some crap logic).

In all seriousness, Civic Center doesn’t need $100M in upgrades (though some additional public restrooms and retail spots would be nice) it needs 24/7 security and dedicated STAR teams. Make the place inhospitable to long term transient presence and their supporting cast of drug dealers and you can fill the remaining gap with event programming. Which is still probably too much for the woke crowd.