DENVER | Main Development Thread #7

[CherryCreek]

Originally Posted by mojiferous

Anyone have a take on this? http://www.bizjournals.com/denver/news/2...s-landmark-ruling-for-condo.html?ana=twt

This court ruling is much more important than this year's legislative action. The trial lawyers opposing condo reform opposed this provision most of all. Arbitration is much less expensive for developers, occurs in private, not public, and is far less prone to unpredictable, crazy (read: expensive results). Further, unlike court cases even a negative outcome in arbitration will not be viewed by courts as setting a precedent.

Particularly for large well known builders, public court actions give the plaintiffs lots of leverage to force big settlements, with the potential notoriety and public record of claims of negligence or poor quality construction. Private arbitration has far fewer such risks.

This is huge, huge, huge, and removes the single biggest impediment to much greater condo development. Given that it's the state supreme court ruling on an issue of state law, I think the impact will be far reaching and immediate. There won't be a condo development in the state that won't adopt this same clause upheld by the court in the condo association documents.

Let the building begin!

[BG918]

Originally Posted by CherryCreek

This court ruling is much more important than this year's legislative action. The trial lawyers opposing condo reform opposed this provision most of all. Arbitration is much less expensive for developers, occurs in private, not public, and is far less prone to unpredictable, crazy (read: expensive results). Further, unlike court cases even a negative outcome in arbitration will not be viewed by courts as setting a precedent.

Particularly for large well known builders, public court actions give the plaintiffs lots of leverage to force big settlements, with the potential notoriety and public record of claims of negligence or poor quality construction. Private arbitration has far fewer such risks.

This is huge, huge, huge, and removes the single biggest impediment to much greater condo development. Given that it's the state supreme court ruling on an issue of state law, I think the impact will be far reaching and immediate. There won't be a condo development in the state that won't adopt this same clause upheld by the court in the condo association documents.

Let the building begin!

I just hope they didn't wait too long and we can still get some projects going during this cycle, which is likely in its last year or two if we're lucky. The next cycle may be to condos what apartments were during the past 5 years.

[TakeFive]

Originally Posted by CherryCreek

This court ruling is much more important than this year's legislative action. The trial lawyers opposing condo reform opposed this provision most of all. Arbitration is much less expensive for developers, occurs in private, not public, and is far less prone to unpredictable, crazy (read: expensive results). Further, unlike court cases even a negative outcome in arbitration will not be viewed by courts as setting a precedent.
Let the building begin!

Somewhere, bunt is quietly smiling.

Nice clarification btw.

Originally Posted by BG918

I just hope they didn't wait too long and we can still get some projects going during this cycle, which is likely in its last year or two if we're lucky. The next cycle may be to condos what apartments were during the past 5 years.

I don't think the timing is so much of a problem going forward. What's unfortunate is that construction costs have gone up a chunk. Too bad there weren't projects done several years ago at a lower cost point.

Originally Posted by EngiNerd

there is still a HUGE shortage here of what I call "attainable" (I think affordable went out the window about 5 years ago in CO) housing.

Priceless

[EngiNerd]

Originally Posted by BG918

I just hope they didn't wait too long and we can still get some projects going during this cycle, which is likely in its last year or two if we're lucky. The next cycle may be to condos what apartments were during the past 5 years.

I think they will get it in, the tide is already turning based on more announced projects going toward ownership instead of rental, plus there is still a HUGE shortage here of what I call "attainable" (I think affordable went out the window about 5 years ago in CO) housing. Just anecdotally from conversations with many of my renter friends and friends-of-friends, there has to be a sizable pent up demand for housing under 500k, which more condos and townhomes construction should hopefully fill (well, maybe outside of downtown...)

[Denver Dweller]

http://www.denverpost.com/2017/06/05/orc...m_term=0_e8b1506f0c-b50e738c53-147998669

[HighSt.]

So a little bit about what's going on at the corner of 17th and California:

Originally Posted by TakeFive

Fair enough point; but wait... what is your source on all that? Forget the architect part but the last, best thing I've read was Sam Hill's linked piece by Adrian D. Garcia in Denverite above.

So here I go again with literal hearsay, but:

I was downtown standing in line with a guy wearing a "HINES" shirt getting breakfast this morning. Started shooting the breeze with him about 1144 Fifteenth, turns out he works at Dominion Plaza. I alluded to the possible development next door and he goes:

"Well, they signed a ten year lease on the parking lot."

I'm not experienced with the machinations of high rise development, but that's a pretty significant capital outlay if you aren't going to build something, no?

[mhays]

I imagine there's an escape clause. With highrise sites often valued in the tens of millions, a little ol' parking contract shouldn't get in the way.

Let's say it's an acre. Room for maybe 150 cars. If that goes $20 x 300 x 150 that's $900,000 per year, before taxes, staff, maintenance, insurance, and so on. If prime highrise sites are $400/sf that's $17,424,000. That's a wild guess at DTD land prices.

[bunt_q]

If those numbers are even close I would take a $900,000 cash flow over a one-time $17 million payout any day of the week.

[LooksLikeForever]

The Denver Post featured plans for the Stapleton TOD project kicking off next spring: http://www.denverpost.com/2017/06/06/off...tral-park-station-development-stapleton/

I'm glad they're planning something fairly aggressive and note the importance of creating a memorable, urban space (such as it is).

[ddvmke]

I've been noticing an increasingly massive hole in the ground in the area between Colfax, Osage, LRT tracks, and Domo restaurant over the past couple days. Arbitrary searches turned up "Osage Apartments" in 2002 that never went through and the Mariposa plan doesn't appear to cover this area, so was wondering if anyone has any info on what's going on here.

[Alchemist]

Originally Posted by ddvmke

I've been noticing an increasingly massive hole in the ground in the area between Colfax, Osage, LRT tracks, and Domo restaurant over the past couple days. Arbitrary searches turned up "Osage Apartments" in 2002 that never went through and the Mariposa plan doesn't appear to cover this area, so was wondering if anyone has any info on what's going on here.

This has already been discussed. It is an apartment called "The Wellington." From the beginning of May.

[QUOTE=Interzen;7796935]
Here are the layout and elevations of the Wellington Apartments slated for Colfax and Osage. Looks like one continuous parking garage the entire half block length along Osage.






SOURCE

The architect is Studio PBA and they have a rendering.
http://www.studiopba.com/the-wellington-osage

As you can tell from the drawings, it is not very pedestrian friendly along Osage.

[mhays]

Originally Posted by bunt_q

If those numbers are even close I would take a $900,000 cash flow over a one-time $17 million payout any day of the week.

Do they fill it 300 times per year at $20 per space? And what are the expenses? I have no idea on either.

Browsing through Denver commercial properties the $400/sf figure seems like a fair guess. But the only examples were LoDo etc. going for the upper 200s. As land availability gets tighter it could get to the four figures...holding might be a great bet.

[TakeFive]

Originally Posted by mhays

Do they fill it 300 times per year at $20 per space? And what are the expenses? I have no idea on either.

Browsing through Denver commercial properties the $400/sf figure seems like a fair guess. But the only examples were LoDo etc. going for the upper 200s. As land availability gets tighter it could get to the four figures...holding might be a great bet.

Got a question. You have any idea what Amazon's parking ratio is at their new HQ campus? I know they're taking space in downtown but the campus is not right in downtown but at the edge, would that be correct?

[mhays]

Some of it is highrises that extend the CBD itself. In the CBD the upper limit is always 1/1000, which equals about 1 per 6 or 7 workers given that Amazon has a high worker density. For other companies that would be more like 1 per 5 or traditionally 1 per 4. Some of their buildings are midrises (and older lowrises) that are outside the Downtown core in South Lake Union...I don't know the code limits, but anecdotally they seem to do some 1.3/1000 in some cases.

[TakeFive]

Originally Posted by mhays

Some of it is highrises that extend the CBD itself. In the CBD the upper limit is always 1/1000, which equals about 1 per 6 or 7 workers given that Amazon has a high worker density. For other companies that would be more like 1 per 5 or traditionally 1 per 4. Some of their buildings are midrises (and older lowrises) that are outside the Downtown core in South Lake Union...I don't know the code limits, but anecdotally they seem to do some 1.3/1000 in some cases.

Thanks. The campus is more downtown/urban than I had guessed.

[trubador]

Originally Posted by bunt_q

If those numbers are even close I would take a $900,000 cash flow over a one-time $17 million payout any day of the week.

Is my math wrong or does this have a negative IRR? You would need to see a double digit growth rate in revenue to even come close.

[ddvmke]

Originally Posted by trubador

Is my math wrong or does this have a negative IRR? You would need to see a double digit growth rate in revenue to even come close.

I'm with you, assuming you're actually taking home the $900k and you can get average market rate of returns elsewhere, I'd take anything over $11.5m. Sell sell sell, build build build!

[twister244]

Small steps in the RiNo Giambrocco development.

http://www.businessden.com/2017/06/06/investors-add-rino-holdings-8m-warehouse-property-buy/

[semiurban]

1) Greenwood Village voters are a major disappointment.

2) Steel going up on 16 Chestnut.

[Mulligan]

Originally Posted by semiurban

1) Greenwood Village voters are a major disappointment.

2) Steel going up on 16 Chestnut.

1) AGREED!
From the Post article: “It’s a clear mandate. There is no doubt about that,” Jerry Presley, a former City Councilman and one of the leaders of the opposition campaign, said Tuesday night. “I think we won this election for several reasons, and one of which is we have passion. People who were against this, they weren’t doing this for any financial reasons. It’s because we love our city and we don’t want it to be urbanized.”
DUDE YOU'RE IN GREENWOOD VILLAGE. IT'S ALREADY URBANIZED!

2)