DENVER | Main Development Thread #7

[SirLucasTheGreat]

BusinessDen had an interested story on Stan Kroenke wanting to redevelop the parking lots outside of Ball Arena. According to the article, these parking lots couple with River Mile would expand downtown by 40%

https://businessden.com/2022/05/02/kroen...acres-of-parking-lots-around-ball-arena/

[SirLucasTheGreat]

One more photo of the Ball Arena/River Mile vision

[mayco]

It will certainly be interesting to watch the area transform over the next couple of decades. I do wish it would be as quick as all the development around Union Station, but I think that is very wishful thinking.

[DenverInfill]

Originally Posted by mayco

It will certainly be interesting to watch the area transform over the next couple of decades. I do wish it would be as quick as all the development around Union Station, but I think that is very wishful thinking.

I totally understand the desire for it to build out quickly, but spreading it out over a couple of decades will ultimately provide a more eclectic mix of architecture and infrastructure design as trends emerge and evolve over time. At some point in the future, the DUS area will be easy to tag as being "so 2010s" in its look and feel. Time will tell if that's a good or bad thing, but I like urban neighborhoods with some decade diversity.

[SirLucasTheGreat]

How realistic, even over the course of decades, will it be to have other downtown districts that are comparably vertical to the Central Business District? The vision I have seen for River Mile and the Ball Arena seems to include a forest of 50 plus story towers. Weren't the bulk of our towers built during an oil boom in the 1980s where many developers built towers on spec? I'm just curious whether it is reasonable to expect our market to produce that sort of height even with time.

[mhays]

The rendering appears to suggest a lot of housing (skinnier towers) in addition to some offices. With the Downtown fringes filling up, tall towers seem very doable, particularly if the district is nice enough or close enough to jobs that people will pay a premium for it. I'd expect more of these on the other Downtown fringes too.

Separate topic: What about Auraria? I just glanced at their 2017 20-year plan. There are two student residential projects, both in the five-year horizon, i.e. hopefully done or underway by now. Is there a chance at more intensive use, like more student housing, a hotel or two, a couple buildings for start-ups related to the institutions...? For such as huge campus, it doesn't seem to be pulling its weight in urban terms. Student housing seems particularly important as Denver housing gets more expensive.

[TakeFive]

Nice comment

Originally Posted by DenverInfill

I totally understand the desire for it to build out quickly, but spreading it out over a couple of decades will ultimately provide a more eclectic mix of architecture and infrastructure design as trends emerge and evolve over time. At some point in the future, the DUS area will be easy to tag as being "so 2010s" in its look and feel. Time will tell if that's a good or bad thing, but I like urban neighborhoods with some decade diversity.

----------------------

Originally Posted by mhays

Separate topic: What about Auraria? I just glanced at their 2017 20-year plan. There are two student residential projects, both in the five-year horizon, i.e. hopefully done or underway by now. Is there a chance at more intensive use, like more student housing, a hotel or two, a couple buildings for start-ups related to the institutions...? For such as huge campus, it doesn't seem to be pulling its weight in urban terms. Student housing seems particularly important as Denver housing gets more expensive.

Ken could give you a street-level view and feel for Auraria.

It has certainly 'grown up' a lot over the last 15 years. Density has been added simply by going from one-story to 3 or 4-story new buildings. Other than for some student housing I don't see higher or more vertical development happening in the near term.

I rather like its urban-campus footprint which has grown by taking over what used to be industrial uses. Light rail was also added and the campus still serves many suburban commuter students.

[TakeFive]

Latest migration trends

These are the cities everyone wants to move to right now, according to a top relocating company
May 2, 2022 By Tristan Bove - Fortune via Yahoo.com

Two years into the pandemic, people continue to hunt for greener pastures in more affordable towns better suited to a pandemic-era lifestyle than big coastal cities.

Larger homes, gardens, and a more affordable cost of living suddenly became much more important, and data reflecting last year’s moving patterns is beginning to reflect these new considerations.

So, let's see the list.

1. Houston - - 2. Las Vegas - - 3. Phoenix - - 4. Charlotte - - 5. Denver
6. San Antonio - - 7. Dallas - - 8. Orlando - - 9. Austin - - 10. Chicago

Cities in Sun Belt states have become the new hotspot for Americans looking to move, according to a new survey by moving truck rental company Penske,

Just as interesting is what is NOT included - No West Coast cites.

Office Sublease Space Might Be Peaking In The Bay Area, But Don't Relax Yet
April 26, 2022 By Joseph Gordon, Bisnow

Notably, San Francisco is struggling with over 6 million square feet of sub-lease space. A few new tenants are taking advantage of the sub-lease space rates to grow their city presence while other sub-lease space is being turned back to the landlord.

Note: There seems to be a back-to Silicon Valley trend.

Americans are moving out of urban counties like never before
April 28, 2022 By Grace O'Donnell and Adriana Belmonte - Yahoo! Finance

Americans leaving urban counties reached a new high in 2021 as droves of people settled in suburban and exurban counties.

More than two-thirds of large urban counties saw their populations decline, according to a recent report by the Economic Innovation Group (EIG) that used federal statistics. This marked the first time in 50 years that counties with an urban center and more than 250,000 people experienced negative growth as a category.

Denver is clearly bucking the trend
as development in the city (center) surges on. I tribute this to Ken/DenverInfill

Seriously though, I see Denver benefitting immensely from their infill development as apposed to (just) city-centered high rise development. It has created different nodes of (denser) development and interesting new/redeveloped neighborhoods, whether along Brighton Blvd, 38th and Blake, Golden Triangle etc etc.

Investors Are Still Buying Denver Real Estate — They're Just Choosier Now
April 24, 2022 By Molly Armbrister, Bisnow Denver

Institutional investors still like Denver but are pickier about what they buy than they were before the coronavirus, seeking quality buildings and high-credit tenants to entice them to part with their money in a recovering capital markets environment rife with uncertainty.

Office and industrial sales in metro Denver topped more than $1B in the first quarter of 2022, a marked improvement over the past two years, according to data from CBRE. “There are pockets of strength and pockets of weakness,” said John Jugl, vice chairman of the western region for Newmark and regional lead of the Denver office’s institutional investment platform.

Across all asset classes, buyers are looking for high-quality buildings, particularly new ones, as the flight to quality continues, Jugl said.

This article is about the metro area as apposed to being city center focused so certain attractive suburban markets are equally investable.

[mhays]

That 4/28 population article is talking about 7/1/20 to 7/1/21. I wish the papers would all phrase that as a long-ago COVID-era trend that might have nothing to do with today.

[Sam Hill]

Yep. The covid-induced fleeing of cities was a very temporary blip that is meaningless now. A good journalist should at least phrase it in the past tense.

[TakeFive]

"The lady doth protest too much, methinks"
- Hamlet by William Shakespeare

Originally Posted by mhays

That 4/28 population article is talking about 7/1/20 to 7/1/21. I wish the papers would all phrase that as a long-ago COVID-era trend that might have nothing to do with today.

Reasonable point; however in order to be 'credible' by using Federal data it will necessarily lag some. But 7/21 isn't that old. And if you look at the map it does indicate that western urban areas are doing relatively well, still. I'd agree that urban centers haven't lost all their luster (certainly not in Denver) but general trends may not be in their near-term favor.

Where's the Missing Middle?

Off topic - but when I read Alitos's 'early' release of Roe v Wade by Politico it was just awful. It read much more like a political propaganda diatribe than a well-reasoned legal decision. It's sad when SCOTUS joins the mob of rabid conservatives by beating their chest in this manner. That said...

How much can MIGRATION be attributed to POLITICS?

Haha, this could be one fun debate but histrionics aside I'd guess quite a lot, unfortunately. True, statistics don't talk but the picture is pretty clear.

Seattle - still benefits from a solid Moat with its Bell Cows like Amazon, Microsoft etc.

Portland - for many years the Poster Child seems to have fallen into an abyss.

Minneapolis - they're trying figure what happened and clean up their mess for when things boomeranged on them.

Denver - clinging to the edge of the middle is losing altitude. Colorado Gov Jared Polis who sorta went 'all liberal' a year ago is now trying to walk back some of those (new tax) provisions.

Phoenix - Arizona meanwhile is taxing their businesses less and less while Denver wants to see businesses as the answer to wanting more and more. And Denver is not alone; it was suggested that San Francisco's Prop C which taxed wealthier companies more may be an issue.

No wonder Arizona/Phoenix is On Fire. They were recently rated to have the fastest growth in Biotech. And if you think I'm bragging then you forget I'm "Old School" and preferred Phoenix much better before it became a Hot Ticket.

BTW, I read where Rep. Pramila Jayapal (D-Wash) wants to double down with the progressive push into la la land. I assume she lives in an Echo Chamber so that defeating her is wishful thinking, no?

[DenverInfill]

Originally Posted by mhays

The rendering appears to suggest a lot of housing (skinnier towers) in addition to some offices. With the Downtown fringes filling up, tall towers seem very doable, particularly if the district is nice enough or close enough to jobs that people will pay a premium for it. I'd expect more of these on the other Downtown fringes too.

Separate topic: What about Auraria? I just glanced at their 2017 20-year plan. There are two student residential projects, both in the five-year horizon, i.e. hopefully done or underway by now. Is there a chance at more intensive use, like more student housing, a hotel or two, a couple buildings for start-ups related to the institutions...? For such as huge campus, it doesn't seem to be pulling its weight in urban terms. Student housing seems particularly important as Denver housing gets more expensive.

The Auraria Campus is kicking off a full redo of the campus master plan. The expectation is that this new plan will push the urbanism even more than the last one, which wasn't overly ambitious with density and mixed uses.

The issue is that the state legislature provides very little in terms of capital funding. Several of the new buildings built on the campus this past decade were funded by the universities themselves by tapping various pots of money and student fees, and not from capital allocations through the Department of Higher Education as would be the normal revenue source. That isn't expected to change, so it is anticipated that the new plan will encourage a lot of public/private relationships to help fund new buildings. This could certainly result in higher densities. A private developer might not be too interested in partnering to build an 8-story building on the campus with 4 going to academic purposes and 4 going to private leasing. But a 20+ story building is another thing. IMO, the odds are pretty good that buildings on campus will grow in height, mix of uses (lots of student residential and non-student affordable) and other non-academic uses.

[mhays]

That's good to hear.

I'm seeing a lot of colleges focus on PPPs...debt isn't on their books (just lease obligations), they can mix private-sector costs and public-sector financing, they can encourage spin-offs that support the education and eco-devo missions... An institution can do one even if they're leasing the whole thing, or might do so eventually.

Likewise, private student housing is booming, whether on private land or institutional land. I bet they'd love to get their hands on a few sites.

[DenverInfill]

Agreed. There's strong demand for student housing. Auraria didn't get its first on-campus dorms until last fall, although a decade or so ago there was some student housing building across the street from the campus border. I think there's demand for several thousands of student housing units, from studios through housing for couples with kids.

The one thing the campus has of great financial value is the land. If they can be creative and partner with the private developers by provided the land as their equity contribution, seems like a real win-win-win to me. Land costs in a downtown setting account for a big chunk of the development cost of course.

[bunt_q]

Originally Posted by TakeFive

Denver - clinging to the edge of the middle is losing altitude. Colorado Gov Jared Polis who sorta went 'all liberal' a year ago is now trying to walk back some of those (new tax) provisions.

Phoenix - Arizona meanwhile is taxing their businesses less and less while Denver wants to see businesses as the answer to wanting more and more. And Denver is not alone; it was suggested that San Francisco's Prop C which taxed wealthier companies more may be an issue.

What new tax provisions are you talking about?

What has Denver done that targets business for more and more?

I can't think of a single thing, so I am wondering what you are referring to.

[wong21fr]

Originally Posted by DenverInfill

Agreed. There's strong demand for student housing. Auraria didn't get its first on-campus dorms until last fall, although a decade or so ago there was some student housing building across the street from the campus border. I think there's demand for several thousands of student housing units, from studios through housing for couples with kids.

The one thing the campus has of great financial value is the land. If they can be creative and partner with the private developers by provided the land as their equity contribution, seems like a real win-win-win to me. Land costs in a downtown setting account for a big chunk of the development cost of course.

MSU Denver has studied student housing over the years. The last analysis was that they needed over 1,500 units, it might have been as high as 3,000 IIRC, brought online within a five year time-frame for it to make financial sense. This high-capital hurdle has been the biggest impediment to Auraria's largest institution developing student housing.

[bunt_q]

Originally Posted by DenverInfill

The one thing the campus has of great financial value is the land. If they can be creative and partner with the private developers by provided the land as their equity contribution, seems like a real win-win-win to me. Land costs in a downtown setting account for a big chunk of the development cost of course.

A few considerations of course. (1) Will the campus allow market rents? Most do not; the more campuses control pricing, the harder it is to pencil; (2) particularly at a place like Auraria, is the campus guaranteeing some number of students? Not really a tradition of requiring on-campus housing, so if not (2), then (1) is all the more important. (3) Is it students only? harder for campuses to not have a guaranteed annual payment (the lease mhays refers to - that can be a lease from the university; not necessarily to the university) if the answer is no. And so on and so forth.

[TakeFive]

Originally Posted by DenverInfill

The Auraria Campus is kicking off a full redo of the campus master plan. The expectation is that this new plan will push the urbanism even more than the last one, which wasn't overly ambitious with density and mixed uses.

Does this mean that there are no other pending projects for the foreseeable future at Auraria?

Originally Posted by mhays

That's good to hear.

Likewise, private student housing is booming, whether on private land or institutional land. I bet they'd love to get their hands on a few sites.

Greystar, who's been involved in a number of Denver apartment projects was a front runner in student housing. There's been a number of projects near ASU, both their Tempe campus and their downtown Phx campus but none on campus that I'm aware of. But Auraria, with three different schools has been mostly a commuter campus with a lot of part time students although I assume this is changing some.

Carmel Properties (San Francisco/Denver) developed a nice off-campus project that DenverInfill reviewed when it was called Wellington Apartments. It's now called CoLab Apartments and they're taking reservation for the fall semester.

Originally Posted by bunt_q

What new tax provisions are you talking about?

What has Denver done that targets business for more and more?

I can't think of a single thing, so I am wondering what you are referring to.

Sorry, my language is confused. That was intended for the state legislature which I also spoke to.

[TakeFive]

Originally Posted by SirLucasTheGreat

BusinessDen had an interested story on Stan Kroenke wanting to redevelop the parking lots outside of Ball Arena. According to the article, these parking lots couple with River Mile would expand downtown by 40%

This is a nice site layout as well.


Courtesy of KSE

This is a bit hilarious from CBS4: https://denver.cbslocal.com/2022/05/03/kroenke-sports-entertainment-plans-lots-around-ball-arena/

“That area and the area around Mile High Stadium, these are the next frontiers for urban planning,” said Darrin Duber-Smith, a senior professor at Metropolitan State University of Denver.

“Is there a need for all of this extra retail and all of this extra space? Do we really need to expand the footprint of downtown Denver? I’m not sure if there’s a real necessity there.”

[DenverInfill]

Originally Posted by TakeFive

Does this mean that there are no other pending projects for the foreseeable future at Auraria?

No. The CU Denver Engineering Building is moving forward into the design phase. https://www.ucdenver.edu/about-cu-denver/our-campus-community/anchor-of-engineering