DENVER | Main Development Thread #7

[TakeFive]

Sound like the type of project that X Denver would propose

Originally Posted by Ich

Looks like another big proposal for AS.

25 stories, 646 units, 396 parking spaces, office and retail.

https://denverite.com/2022/05/19/develop...paso-los-angeles-limousine-express-site/

Hopefully all this development helps active the retail core in downtown.

The owner of the property is 2215-2243 California Street LLC, which is registered to a company based in Chicago.

[DenvertoLA]

Originally Posted by Ich

Looks like another big proposal for AS.

25 stories, 646 units, 396 parking spaces, office and retail.

https://denverite.com/2022/05/19/develop...paso-los-angeles-limousine-express-site/

Hopefully all this development helps active the retail core in downtown.

646 units!! How fat is that lot? Or how small are these units?

[rds70]

Originally Posted by DenvertoLA

646 units!! How fat is that lot? Or how small are these units?

The applicant is the CMK Companies. The concept request mentions 2 buildings, so the project could include more than just the one parcel.

[RyanD]

Better than the old 2215 California proposal which was 14 stories / 300 units.


https://denverinfill.com/2021/04/arapahoe-square-roundup-apr-2021.html

[TakeFive]

Uncles, Cousins, In-laws; One by one they're all coming from Chicago to Denver

Originally Posted by rds70

The applicant is the CMK Companies. The concept request mentions 2 buildings, so the project could include more than just the one parcel.

Here is their current project "Coming Soon"

1400 S Wabash Ave in South Loop


1400 S Wabash Avenue. Rendering by Pappageorge Haymes

Looks like the had a partial construction permit issued last December so no idea what stage they're actually at.

[TakeFive]

Because I don't often get the chance to drive along Brighton Blvd

I want to thank RyanD for letting me ride in the back of his wagon.

AMLI Art District, a 337 apt project is now starting to rent units. Also DriveTrain, an 417 apt project is also starting to lease units.

Seems I recall DriveTrain starting later than AMLI Art District which would make sense since DriveTrain is using the new color palate for the interiors which are grey tones. I wouldn't be surprised if Hanover RiNo uses grey tones but it's too early to know (without asking). Good guess that projects still in the early construction phases use grey tones partly b/c that's what's being stocked. Grey is all the rage.

[bulldurhamer]

Amusing piece from the denverite about looming changes for bus lanes. Apparently a bus lane is coming to east colfax.

The denver streets lady says roads are better without cars, to which I wonder why they don’t just want to remove the roads altogether ?

Meanwhile rtd says the busses barely function as it is and they still lack drivers among other things.

In short, they’re taking away car lanes for a bus service that doesn’t really work to the delight of people who think cars are bad.

https://denverite.com/2022/05/19/denvers...ns-for-better-buses-may-make-them-safer/

Is this going to look like that empty train car i see go by every day?

Will the busses be adequately funded or are we just messing with drivers again because it’s fun?

Ps. I move that anybody who bikes everywhere never be allowed in a serious transportation discussion.

[bulldurhamer]

There are way too many bike lanes now. The dangers for pedestrians are out of control with bikes and scooters coming from all directions, giving drivers even more distractions.

There should be a bike network, but just not freaking everywhere. If you wanna bike and put everyone at risk while you do this, you should be limited to select corridors. The bike lobby has way too much power for such a ridiculously inefficient and unreasonable mode of transportation.

The bike crazies want to reduce cars for them. I guess we’ll all bike and bus because tyler the bike guy thinks getting places relatively safely and dry in cars is bad.

Meanwhile there’s still nothing about sidewalks. Something we’ll all use, unlike a scooter lane or a sketchy 🞵🞵🞵 bus ride to aurora.

Only way to get anyone besides the impoverished to ride that bus will be to kick the impoverished off the bus. Wonder how well that will go over. Yall were all just whining about union station getting taken over by the poor. Well that’s who lives out on this bus line. This is a total cluster in the making

[Sam Hill]

How is bulldurhamer supposed to flip off random Denverites if he doesn’t have enough sidewalks?

[bobg]

Deleted

[bobg]

Originally Posted by bulldurhamer

Meanwhile there’s still nothing about sidewalks.

Denver Steets Partnership has been petitioning for sidewalk funding for weeks, they've been announcing where you can sign it on posts on reddit on r/Denver and their Twitter handle @BikeWalkBus there's also been stories about it like this one from 9news https://www.9news.com/article/news/local.../73-b624cab1-e31e-465b-90df-9c841b12f952

If you're that passionate about it looks like they're at DUS today from 1 to 4 go sign it and get involved. It's much better than yelling at clouds on the internet.

[TakeFive]

These have to be the best (two) comments you've ever made

Originally Posted by bulldurhamer

Amusing piece from the denverite about looming changes for bus lanes. Apparently a bus lane is coming to east colfax.

The denver streets lady says roads are better without cars, to which I wonder why they don’t just want to remove the roads altogether ?

and I couldn't agree more.

I went through the "Denver Moves Transit 2" released April 13th 2022 and like any good liberal city, I suspect, they pay a lot of money to come up with a bunch of gibberish that's largely a total waste of brain space and time. Fantasies are nice but the disconnect between that and the real world are stark.

I hope you get your sidewalks as I now appreciate they make more sense than other stuff.

[laniroj]

Originally Posted by Sam Hill

It occurs to me that someone will likely make the argument that supply will be reduced because of the hurdle of a 4% linkage fee. (I’ll have to look it up again, but if I recall, it’s 4%.) I’m going to go ahead and preemptively respond since I have a moment and I may not get another moment again soon (I’m at work).

I doubt supply or demand will budge due to these new regulations. On the demand side things are very tight obviously. But the supply side is a free-for-all. Build as much as you can as fast as you can as the margins are big and will only get bigger as rents continue to skyrocket. If anything, some developers may cut corners on quality to try to compensate, but I don’t think any of them are going to get scared away from the market.

How can somebody think that supply won't budge? Maybe not RIGHT NOW, but it will have an effect eventually. I'll make this easy for everyone on this forum with numbers. The industry standard is a 6% return on cost (ps what industry enriches itself on a 6% return? Vilification of industry is a real problem). Say you have a standard 250 unit project at $350k/unit cost, total $87.5mm, and you find a standard 70% loan so your equity in the deal is $26mm then your annual return on cost threshold is $1.6mm. If you add 4% cost to the deal, $3.5mm, you add additional return requirement of 210,000. That's $70/unit per month. All these decisions have consequences and yeah, $70/month extra right now seems like nothing, but when the market isn't hot, what happens then? Markets go in cycles, you can't just legislate for the up cycle.

[laniroj]

Originally Posted by TakeFive

Welcome to our Algorithm World

I know from helping my son find a place that Landlords, like the airlines and lots of businesses use variable pricing. You can go on the computer and the price of the unit you're considering can go up (or down) from one day to the next. Too many vacant units and some people will score a bargain.... and so it goes.

Yep - except most of the big owners utilize software that changes rents up/down in real time - to the minute. Day to day is the small mom and pop landlords and which side of the bed they woke up on...

[wong21fr]

Originally Posted by TakeFive

I went through the "Denver Moves Transit 2" released April 13th 2022 and like any good liberal city, I suspect, they pay a lot of money to come up with a bunch of gibberish that's largely a total waste of brain space and time. Fantasies are nice but the disconnect between that and the real world are stark.

Asides from the first 19-pagess of fluff, what's your issue in the report? The first projects are all incremental improvements to make the bus system more frequent and reliable (asides from east Colfax which is transformative), focusing on the most traveled corridors, and the second phase is where the real shift begins with BRT roll-out across the city. The report highlights the funding gaps to get from phase I to II and III.

Asides from the Brighton/GVR BRT add (which is an extension of the BRT because god-know that Brighton will need the BRT connection in the future) the equity argument that was put in their dovetails with the original transportation system vision. Yes, it's a current state of affairs box check, but I don't see the disconnect.

[laniroj]

Originally Posted by bunt_q

I'm not sure I'd characterize supply as a "free for all." It might feel that way, but there's pretty strong evidence that we are still building far less than we would if it was a "free for all." And while the curious behaviors of the seemingly rich and powerful always fascinate the "little people," development is hard, it's slow, and it is wildly expensive, and yes, risky. There isn't a developer out there that has the luxury of not passing on third-party costs, dollar for dollar. (Or more often, $1.10 for $1.00).

Pretty strong evidence? I'd say the evidence is harder than graphene. On an annual basis, we produce the same amount of housing as we did 50 years ago with 40% more population. If anyone out there wonders why housing costs more by every single metric that exists, this is the reason why. I advocate that we need to build our way into a massive bubble that pops very badly and pushes housing costs meaningfully lower. It's a disastrous scenario, especially for someone like me who owns housing, but it's a needed change to allow younger generations of Americans to more fully thrive and continue the trend of passing down a better America.

[laniroj]

Originally Posted by TakeFive

...Sam has been correct - so far. Construction costs keep going up but builders keep building.

I still have no crystal ball about RE going forward. I suspect so long as projects "pencil" construction will continue even though the rest of the economy seems to be falling apart.

Good metrics to have a 'crystal ball' as pertains housing:
Housing starts
Housing permits

Look at the 6 month change for multifamily >20 units and 3 month change for single family. Inputs on the front end of multifamily development are often measured in years, 1-3. Single family homes are a better instant gauge as the vast majority of production happens on finished lots and permits which don't take but maybe 4 months to pull. If you see a big movement one way or the other on either of these spectrums, something is happening and expected to move further in that direction over at least the next two quarters.

For now, single family is slowing and multifamily is gaining steam - if you look at my timelines above, that might make sense. Drastic construction cost inflation slows down single family production but not multifamily yet - if you're 2 years and millions into a deal, you find a way to take the risk and make it pencil - even if your return threshold is lower - there is still 2% money in this world, though drastically less than 5 years ago.

[laniroj]

Originally Posted by Sam Hill

Sounds like there’s not enough liquidity in the market then. So maybe there’s a labor bottleneck and a liquidity bottleneck?

If you can’t make a project pencil with rents as high as they are, then how much higher do the rents need to go?

I’m not arguing that every single project that any developer proposes pencils in this market. I’m arguing that a 4% fee, at a time when the market is completely out of whack and in favor of developers (who are making huge profits right now), won’t slow new supply.

Maybe if the fees are permanent, in some future market…

We’ll see.

It's fascinating to me (honestly) how different people's minds work on the various inputs they consider important in decision making. Let's propose a real life scenario:

If rents increased 15% in the last year, but costs increased 25% in the past 6 months (which is probably low), are real estate developers making more or less money than 1 year ago? I would argue less money...

What the City did two years ago was say hey developers, come share your proformas with us so we can figure out how to assess the viability of development so we can figure out a linkage fee that works for the market. What happened was a few special interest developers shared their proformas (because the real pros and unit producers would never do that) then the City checked the box and said ok, we now have the financial comprehension of how capital is invested in real estate development. Then the City went out and said hey all these Cities charge these affordable housing fees so we should too. Not for one second did the City look at whether or not the fees other cities charge had an accretive or detrimental affect on production, they simply categorized the fees other cities charge and found justification for a broad range of fees they could charge - then they took damn near the top end of the spectrum of fees charged nationally. In the longer term, which is how governments should be governing, this will have a detrimental impact on housing production, it will increase the cost of all housing, and it will push out the lowest earners amongst us at a faster rate while working to support affordable housing at the margins with a wholly inadequate production.

[Ndj]

Anyone know what the status of Evolve Towers is these days?

[TakeFive]

If Denver voters want to spend the $4 billion needed then it's certainly their right to do

Originally Posted by wong21fr

Asides from the first 19-pagess of fluff, what's your issue in the report? The first projects are all incremental improvements to make the bus system more frequent and reliable (asides from east Colfax which is transformative), focusing on the most traveled corridors, and the second phase is where the real shift begins with BRT roll-out across the city. The report highlights the funding gaps to get from phase I to II and III.

If you're over 30 years old then there's a good chance you're out of touch with where the 'next generation' is going.

Blacks are moving to the desert

I pick up this young guy; he lives at the same apt complex as my son. He climbs into the back seat and I proclaim "Geez, I didn't know I was picking up such a good-looking guy" (He laughs) Dude is decked out in sport coat and tie. We get to chatting and he moved to Phoenix about 6 months ago from Philly; he works at the W Hotel in Old Town Scottsdale.

I pick up this very attractive young black immigrant from the Candy Store which is a north Phoenix 🞵🞵🞵🞵🞵 🞵🞵🞵🞵. Half hour drive home to a seedy apartment with potholes in downtown Phx. Not sure where she was from; she didn't speak great English but everybody gotta work and everybody gotta live somewhere.

Every person I pick up has their own personal story that starts at Point A and ends at Point B. The young lady would clearly feel 'vulnerable' to try to get back and forth by bus including the distance from bus stop to where she lived. In both instances riding a bus would be an hour and a half trip as apposed to 20 minutes.

It's just my opinion that whether 'dirt poor' or privileged Time and Convenience are very important to the Smart Phone Generation. You can't just "build it and expect that they will come." The more important question is will the bus take them where they need to go?