DENVER | Main Development Thread #7

[COtoOC]

Originally Posted by TakeFive

Can't believe I wasn't aware of Clarks given I lived in Aspen around the time he was there.

The Clark's Market that opened in Lowry is stated as being 25,000 Sq Ft so that's a nice size.

My understanding with Amazon Fresh is that you need to be a Prime member or become one - which might not be a problem I guess.

I didn't know about Clark's. It's open now? I've been going in to the Lowry Target and didn't notice a grocery store yet.

I do love that Target. Easy in and out for me and I don't have to fight traffic to get up to the Northfield one.

[mhays]

Originally Posted by laniroj

True but this didn't used to be such a big issue because we used to have a competitive bid construction industry wherein the developers would do the entitlement and plans and then contractors would come in after that and competitive bid against other contractors for the work. That world is long gone and contractors, especially for large projects, typically require a pre-con agreement nowadays and won't competitive bid. Some pre-con deals they get paid others they don't. So while I can appreciate that contractors get strung along, because they do, it's of their own choosing because they all refuse to hard bid projects anymore. Contractors can avoid at risk bids now because there is more work than contractors to perform it. Hope they enjoy it while it lasts.

The low-bid process is a horrible way to build anything complex, and far worse for a contractor attempting a stable workload. It'll always have its place, primarily for less-complex work, but it's not coming back for the tough projects.

The bid winner tends to be whoever interpreted the drawings in the most lawyerly way, omitting everything not clearly specified, so they can charge add-ons. Or their price uses marginally-qualified subs. The lack of contractor input in design sets you up for big problems at every step--the developer is flying half-blind on cost until the bid, and afterward there will be a lot of unbuildable or missing details to fix. The entire process is adversarial and risky.

Contractors like to negotiate work because it helps them manage workload. Even with the uncertainties I described, your "dance card" is far more clear than it would be with low-bid, where you have no idea what you'll build next. With negotiated work you can guage the likelihood of each project moving forward and have a general idea where you'll end up. With bidding you can't, so you staff somewhere in the middle and hope you win your share of last-minute bids.

From an employee perspective, bidding means your future is always in doubt due to the added difficulty managing workload. And you work against designers and clients as much as with them. Some people like that but a lot gravitate toward a more congenial environment.

[laniroj]

Originally Posted by mhays

The low-bid process is a horrible way to build anything complex, and far worse for a contractor attempting a stable workload. It'll always have its place, primarily for less-complex work, but it's not coming back for the tough projects.

The bid winner tends to be whoever interpreted the drawings in the most lawyerly way, omitting everything not clearly specified, so they can charge add-ons. Or their price uses marginally-qualified subs. The lack of contractor input in design sets you up for big problems at every step--the developer is flying half-blind on cost until the bid, and afterward there will be a lot of unbuildable or missing details to fix. The entire process is adversarial and risky.

Contractors like to negotiate work because it helps them manage workload. Even with the uncertainties I described, your "dance card" is far more clear than it would be with low-bid, where you have no idea what you'll build next. With negotiated work you can guage the likelihood of each project moving forward and have a general idea where you'll end up. With bidding you can't, so you staff somewhere in the middle and hope you win your share of last-minute bids.

From an employee perspective, bidding means your future is always in doubt due to the added difficulty managing workload. And you work against designers and clients as much as with them. Some people like that but a lot gravitate toward a more congenial environment.

Sounds like you must be on the contractor side! No doubt you make many valid points from what I would call the contractor lens, particularly for larger and complex projects, but it's an unbalanced market. Competitive bid serves a need/purpose and the lack of it is a contributing factor, IMO, to today's rampant cost inflation.

Also, the assumption that low bidders win is an incorrect one and for more complex and larger projects, in depth subcontractor vetting by the developer most definitely happens - unless it's the City of Denver as developer (cough cough DIA and convention center).

My general experience has been that competitive bid and pre-construction efforts generally experience the same consultant-liability-weary, specification-happy-contractor requirements even in a fully engaged design-build scenario. As far as pricing, the entire world is flying blind right now, contractors most of all. I'd say real construction inflation is in excess of 1% per month at the moment, probably more.

[mhays]

Yes, I'm from the commercial contractor world! Though now as a freelance consultant (research and writing) I now serve the whole A/E/C/CM/RE world.

If a bunch of the top GCs started bidding work, the reason would be a lack of other opportunities. In that scenario they (and their subs) would bid low. But in a busy construction environment, they might just pad their bids, as they'd consider the fixed-price world more risky.

On public low-bid work in my state, the client doesn't get to vet the GC's subs, who only have to be compliant at a basic level. I wasn't thinking private sector, where you can do a bid/negotiated hybrid.

Not all contractors live their rhetoric about collaboration and togetherness. But that's how the really top firms typically excel, at least in my area. They win the next job with references and reputation, or better yet if the same client hires them again. You can't be a jerk and survive in that world in this city. Maybe you can in some cities (Philly? New York?)

That said, on a billion-dollar project, the challenges and cost risks can be exponentially higher, particularly as more firms are layered in. The kumbaya of a typical office building might not be the same for a mega-project.

[SirLucasTheGreat]

Demolition is underway for Modera Golden Triangle. The old Rocky mountain public broadcasting station building is about halfway demolished

[wong21fr]

I'm doing some volunteer work on a project and currently in the processing getting construction cost estimates. For those in the industry, what are you seeing for commercial building on a $/sf basis in Denver proper?

Two-story construction, metal frame and CMU. About 10K sq ft on first and 2K on sq ft on second. Rooftop deck.

[wong21fr]

Originally Posted by SirLucasTheGreat

Demolition is underway for Modera Golden Triangle. The old Rocky mountain public broadcasting station building is about halfway demolished

Good to hear.

It's going to be crazy in GT with Modera, Evans West, Evans East (if Lennar does both at once), Art Studios, and 990 Bannock all U/C this year. Along with Citizen 10 these will add 1,500 units, a grocer, and several thousand sq. of new retail to the GT. This is becoming a great urban neighborhood.

[TakeFive]

This is not sustainable

Originally Posted by laniroj

As far as pricing, the entire world is flying blind right now, contractors most of all. I'd say real construction inflation is in excess of 1% per month at the moment, probably more.

We do seem to be headed for some "liquidity" contraction but not sure what the impact on CRE will be. Costs would be as much of an issue as liquidity though. Presumably the increased costs along with less liquidity should mean an increase in expected (cap rate) returns for new investment. I see where Bank of America is now predicting seven interest rate bumps of 25bps this year by the Fed - or a little less than 2% total.

Not many $billion projects 'round these parts

Originally Posted by mhays

That said, on a billion-dollar project, the challenges and cost risks can be exponentially higher, particularly as more firms are layered in. The kumbaya of a typical office building might not be the same for a mega-project.

$Billion projects would be limited to road projects or Denver International Airport, AFAIK.

Speaking of road projects

with the ongoing escalation in crude oil prices a lot of projects are going to have to redo their budgets. Fortunately for Colorado, CDOT is heading toward the finish line on many vital freeway projects. Not sure about the City of Denver projects?

Side topic:

For now at least it seems as though the great bi-partisan infrastructure bill is going nowhere fast as the administration tries to impose equity and climate qualifications. Hardly a surprise that Red States are organizing their opposition.

Just curious:

With the groundbreaking of T3 RiNo in November and the subsequent demolition and site prep, has there yet been any signs of real construction?

[TakeFive]

Speaking of Forest City now Brookfield Properties

It isn't every day you see an over $600 million sale of apartments.

Portfolio of Central Park apartments trades hands for $619.5M
Dec 13, 2021 By Jensen Werley – Reporter, Denver Business Journal

The apartment communities were sold on Dec. 8 in seven separate deals, each from and to a different limited liability company. The selling limited liability companies all listed a street address connected to Brookfield Properties’ New York office. Each of the purchasing companies used the same address, which corresponds to the Miami headquarters of Starwood Capital Group, an investment firm.

The six apartment properties — 7575 Town Center, The Aster Conservatory Green, Botanica Town Center, Crescent Flats, The Aster Town Center and The Aster Town Center North — all appear in Brookfield’s online portfolio.

That's quite the sale and investment in Denver apartments but a wise one that not many buyers could manage.

[laniroj]

Originally Posted by wong21fr

Good to hear.

It's going to be crazy in GT with Modera, Evans West, Evans East (if Lennar does both at once), Art Studios, and 990 Bannock all U/C this year. Along with Citizen 10 these will add 1,500 units, a grocer, and several thousand sq. of new retail to the GT. This is becoming a great urban neighborhood.

...and that doesn't even include the possibility of the two Urban Villages behemoths or the City Street retail bonanza of the old Evans School. Golden Triangle is going to be a really special neighborhood in 10 years.

[Robert.hampton]

https://www.bizjournals.com/denver/news/2022/01/28/downtown-denvers-crime-leadership-response.html


Ugh this article is so depressing. Who would have thought 3 years ago we would be talking about urban decay downtown. Although an interesting wrinkle -- which I think I have mentioned before -- is that upper downtown might actually be a bit better off than it was back then, or at least it has bit deteriorated nearly as rapidly (granted its baseline was far worse) as the Union Station side.

[wong21fr]

Deleted

[Whereveryougo]

Originally Posted by TakeFive

With the groundbreaking of T3 RiNo in November and the subsequent demolition and site prep, has there yet been any signs of real construction?

Yes, there are signs of construction. Thinking we should see a tower crane at the site shortly.

Steel House has been idle for a few months with no signs of construction starting but the 7 story Hanover site south of this has had plenty of activity since the start of the new year.

[wong21fr]

Originally Posted by Whereveryougo

Yes, there are signs of construction. Thinking we should see a tower crane at the site shortly.

Steel House has been idle for a few months with no signs of construction starting but the 7 story Hanover site south of this has had plenty of activity since the start of the new year.

Steel House filed for a construction permit on November 1, 2021. Looks like the electric permit application was filed on December 14, 2021 which is the last activity as far as I can tell.

So it's making progress through the permit process but is not yet at a place where we could expect to see per-construction activity.

[TakeFive]

Denver needs an inspiring Crime Czar for a Mayor

Originally Posted by wong21fr

The viscous cycle that's occurring is frustrating (pandemic-induced downtown population reductions -> crime opportunities -> more visible crime -> perception that downtown is unsafe -> reduced downtown population reductions). One way to break it is for the law enforcement (DPD, RTD Security, etc.) to crack down further on criminal behavior, which they are 100% not doing due to morale issues, self-imposed work slowdowns, and staffing issues. The DDP's (not exactly a bastion of liberal wokeness) comment at the end of the article on this is telling: DDP to DPD, "Do your job."

Couldn't read this one but I can guess the gist of it. While I think Mayor Hancock could possibly lean into this, I suspect he's too close to retiring to be a 'shining star.'

I've said previously and I'll repeat Denver needs a (Democrat) Mayor who wants to make his bones on Crime. It may seem a bit odd to compare Denver to the Big Apple and the specific issues are a bit different but if you want to read an inspiring piece on leadership by a Democrat then read this article by Erin Durkin at Politico dated today.


Thank you

Originally Posted by Whereveryougo

Yes, there are signs of construction. Thinking we should see a tower crane at the site shortly.

Steel House has been idle for a few months with no signs of construction starting but the 7 story Hanover site south of this has had plenty of activity since the start of the new year.

I was also a tad curious about Steel House.

[TakeFive]

Thanks for the correction

Originally Posted by COtoOC

I didn't know about Clark's. It's open now? I've been going in to the Lowry Target and didn't notice a grocery store yet.

I do love that Target. Easy in and out for me and I don't have to fight traffic to get up to the Northfield one.

Sloppy reporting there. Should have said "that is scheduled to open"... (some day soon?)

I can occasionally miss-state something and always appreciate being corrected.

[Arapahoe]

For those of you who may not have seen the last shit show on this forum, Ryan moved the crime/homeless/drug and all other civic issue rants to a new thread:

https://skyscraperpage.com/forum/showthread.php?t=249410

He spent a fair amount of time deleting all the other off-topic stuff from the development forum and it would kind of you to please use the appropriate thread when posting non-development topics.

[Arapahoe]

What remains...

The once mighty full-block Denver Greyhound station as seen from 19th St, Jan 2022.

It was all function, no form. Good riddance.

Immediately to the left of the left most debris pile, is the site of 1900 Lawrence (not visible). Two blocks of construction side by side. However, the Greyhound site will not break ground until 2023.

[SirLucasTheGreat]

Nice! When is 1900 Lawrence breaking ground? Curious if they might start before Amacon.

[Denveropolis]

Originally Posted by SirLucasTheGreat

Nice! When is 1900 Lawrence breaking ground? Curious if they might start before Amacon.

I spoke to the construction foreman a month ago when the lot closed and he indicated a March 2022 groundbreaking.