DENVER | Main Development Thread #6

[Fritzdude]

Originally Posted by comoneymaker

Looking back I think a outdoor Amphitheater about the size of Fiddler's would be great in this area.

Something the downtown area needs. Or maybe it can get tied in with the Denver Performing Arts redevelopment. Which ever

Anyone who attended the RiNo musical festival a few weeks ago, held across from the new Blue Moon brewery, it's apparent that the area could support an amphitheater..

[bunt_q]

I think that's the idea behind the amphitheater going in Ruby Park. It's supposed to hold 7,500 people.

[RyanD]

Originally Posted by mhays

Urbanity has some huge advantages cost-wise.

You don't need a spare bedroom because there's a hotel nearby. You don't need a big dining room because there are restaurants, and your building might have a party kitchen. You can even rent space in a nearby workshop for your hobbies.

Utilities can be cheaper because you share walls, and possibly because you don't have as much volume to heat, light, etc.

And then you get transportation's personal and public costs, as well as the cost of every other sort of public infrastructure.

That's all absolutely great on paper, and I agree with your statement but that just isn't what is happening here. After speaking to many business owners and a couple of boards over the past year, business has not increased in proportion to the number residents going in. This is because everyone is living poor in their little (super nice) cracker boxes due to high rents and low(er) wages. They can't afford anything else besides their rent and basic groceries.

Sure, you'll see a lot of Downtown residents walking around, at parks, etc which is great for the urban environment but when it comes to monetary outings, it's just not happening like everyone would have hoped.

That's when us outer ringed neighborhoods and suburbanites come take over the city because we can afford to. j/k - kind of...

Mhays, I'm coming out to Seattle with my wife in October, I'm super excited to see what's going on over there. I've actually never been!

[mhays]

Awesome RyanD, let me know if you want a tour!

Downtown housing certainly doesn't add a ton to retail, but it's nuanced. If density contributes to traffic congestion and loss of parking, the driving-type customers might fall away. And it takes an awful lot of residents to make a dent in the sales for a major downtown. I'd guess another 10,000 downtown residents might mean 300,000 sf of retail based on typical multipliers and guesses. That would mean the average 200-person building would generate 1,500 sf of retail, which is basically a coffee shop. Hotels would have several times that effect on a per-room basis.

I've gradually lost faith in the effect of several hundred units on a neighborhood. Being truly busy takes thousands, at really high densities. And probably a mix of uses.

[RyanD]

The Confluence

Holy tower... And it still has 9 more floors to go!

(click this one for a big version)

Originally Posted by mhays

I've gradually lost faith in the effect of several hundred units on a neighborhood. Being truly busy takes thousands, at really high densities. And probably a mix of uses.

Yep! Which is what we need a whole lot of what's above, at that scale, both apartments and condos.

I'll shoot you a PM when the time gets closer to Seattle.

[TakeFive]

Friday Wrap

In addition to being nice eye candy two buildings have now been declared completed, tenant worthy as well as photo worthy.

The first one is The Wheatley at 2460 Welton Street in the Five Points-Curtis Park neighborhood. RyanD/Denver Infill reminds us that The Wheatley has
"14 for-sale townhomes, and 84 rental apartments, and ground floor retail." Also the finished product came out virtually as nice as the rendering.

I like this one.


Rendering courtesy of Craine Architecture via DenverInfill

The 2nd completed project which has turned out to be the new favorite Photo Op is The Huron. It comes with mixed feelings as the building has been moved from The Prospect neighborhood over to Union Station North. /sigh

RyanD/DenverInfill reminds us that there are 296 apartment units in one long building. Rumor has it though that this project is just as attractive up close and personal as it is in photos, what with the nice brick and steel work.

I really like this one.

Originally Posted by pablosan

[Stonemans_rowJ]

Originally Posted by RyanD

That's all absolutely great on paper, and I agree with your statement but that just isn't what is happening here. After speaking to many business owners and a couple of boards over the past year, business has not increased in proportion to the number residents going in. This is because everyone is living poor in their little (super nice) cracker boxes due to high rents and low(er) wages. They can't afford anything else besides their rent and basic groceries.

Sure, you'll see a lot of Downtown residents walking around, at parks, etc which is great for the urban environment but when it comes to monetary outings, it's just not happening like everyone would have hoped.

That's when us outer ringed neighborhoods and suburbanites come take over the city because we can afford to. j/k - kind of...

Mhays, I'm coming out to Seattle with my wife in October, I'm super excited to see what's going on over there. I've actually never been!

Wages are stagnant, and Denver's median wages to rent (or sales price) is way out of whack. But, it seems that's kind of a broad statement.

How many businesses can quantify their profit growth vs. population growth? Certainly no small business. By all accounts looking at business starts and commercial RE starts, many small businesses are thriving.

millennials and young urbanites are more apt to spend their money on experiences, i.e. daily coffee, dining, bars, festivals, travel etc. then on extraneous possessions.

Lots of young people, the types living in these prime neighborhoods, are also getting help from the bank of mom and dad and/or using the ample amounts of credit being thrown at them.

[comoneymaker]

Originally Posted by bunt_q

I think that's the idea behind the amphitheater going in Ruby Park. It's supposed to hold 7,500 people.

Ruby Park isn't downtown though.

[COtoOC]

Originally Posted by RyanD

The Confluence

Holy tower... And it still has 9 more floors to go!

(click this one for a big version)














Yep! Which is what we need a whole lot of what's above, at that scale, both apartments and condos.

I'll shoot you a PM when the time gets closer to Seattle.

Wow! Confluence really has an impact on the skyline! And I can see right where 1144 15th will come up.

[bunt_q]

Originally Posted by comoneymaker

Ruby Park isn't downtown though.

Neither is RiNo. If I have to drive, it doesn't matter to me how far I am going.

[RyanD]

1144 Fifteenth




Ken's awesome view (thanks Ken!)

[mhays]

Originally Posted by mhays

Awesome RyanD, let me know if you want a tour!

Downtown housing certainly doesn't add a ton to retail, but it's nuanced. If density contributes to traffic congestion and loss of parking, the driving-type customers might fall away. And it takes an awful lot of residents to make a dent in the sales for a major downtown. I'd guess another 10,000 downtown residents might mean 300,000 sf of retail based on typical multipliers and guesses. That would mean the average 200-person building would generate 1,500 sf of retail, which is basically a coffee shop. Hotels would have several times that effect on a per-room basis.

I've gradually lost faith in the effect of several hundred units on a neighborhood. Being truly busy takes thousands, at really high densities. And probably a mix of uses.

Wow I'm bad at math. An average 200-person residential building would generate 6,000 sf of retail based on 30 sf each for a downtown resident who does most of their spending in the area.

Or maybe 2,000 sf for a smaller node where residents only spend 1/4 of their dollars there.

[TakeFive]

Friday Follies

How do Denver, Boulder tech office markets rank nationally?
Sep 15, 2016 by Ben Miller - Denver Business Journal

How do Denver's and Boulder's tech office markets rank nationally when it comes to being able to (weather) future economic slowing? So-so, says a new report by JLL, which released its 2016 High Tech Outlook this week, with both Denver and Boulder located in the middle of U.S. cities.

Forty-five cities were ranked, and Denver finished No. 23 and Boulder was No. 25 in the rankings.

Looking at the JLL report it's worth pointing out that there's not a lot of difference from cities rated about 13th and 25th

The JLL Report also lists the three largest leases in the 2nd quarter which are:

1. 1801 California - Tenant: Ibotta - Size: 37,710 s.f.
2. 36th and Blake Streets/RiNo - Tenant: HomeAdvisor - Size: 58,696 s.f.
3. Triangle Building/LoDo - Tenant: AutoDesk - Size: 23,884 s.f.

Jll also reports that Denver had 48,500 tech employees in 2001 and has 54,500 today.

Note: The Triangle Building being listed in LoDo is JLL's (not mine)
Note: With the AutoDesk lease the Triangle Building has only about 40,00 s.f. left to lease out of 220,000 s.f.

[TakeFive]

Peer Cities to Denver

Seattle - not really or maybe with an asterisk. Current projections show Lead Dog Amazon climbing towards a goal of having 10 million s.f. by 2019 and a new goal of occupying 12 million s.f. by 2022. It's hard to visualize all that space let alone its impact. Downtown Denver by comparison is currently a little over 36 million s.f. Seattle is also listed 4th on JLL's tech ranking. It's really more aspirational to Denver at this point.

So I wondered about "economic" peer cities

Using Wikipedia's MSA ranking by GDP, city MSA's like Minneapolis–St. Paul–Bloomington, Phoenix–Mesa–Glendale, San Diego–Carlsbad and Austin-Round Rock-San Marcos seem the most fitting Peer Cities to Denver–Aurora–Broomfield. Possibly also Portland–Vancouver–Hillsboro.

Reminder: Denver has a JLL tech ranking of 23rd.

Interestingly, Minneapolis has the strongest GDP and a high JLL tech ranking at 10th. Phoenix is right behind Minneapolis in GDP and has a JLL tech ranking of 16th. Phoenix tech ranking likely goes to its legacy hardware business. Even though it's half of what it once was, it still has over 30,000 employees including Intel and Micron Tech. San Diego is immediately above Denver for GDP with a JLL tech rating of 19th. Although Austin is well back for GDP it is rated a very high 3rd on JLL's tech ranking. Portland is two slots below Denver's GDP but has a JLL tech ranking of 15th.

Focusing more (but not totally) on Denver's urban core, best peer cities might be San Diego, Minneapolis, Austin and Portland.

[TakeFive]

A bullet point review of 2015 census data
Courtesy of Yonah Freemark on Twitter or Online


"Decoding 2015 Census city-level data"
18 May 2016 by Yonah Freemark

These data are for municipalities only, not metropolitan areas

> Biggest losses over past year are Detroit, Chicago, Baltimore & Cleveland. Detroit lost more than 35k ppl since 2010

> Chicago's trajectory is looking down. For 1st time since 2010, the city lost population; down almost 3,000 2014-2015

> But most big cities saw major gains over last year. NYC led pack with +55k, followed by Houston, LA, San Antonio

> Since 2010, NYC has added many people, but so have other cities fueled by infill growth: LA, Denver, Seattle, DC

> Cities whose rank has risen in most-populated list from 2010 to 2015: Austin, SF, Seattle, Denver, DC, Portland, OK City, Las Vegas, KC, ATL

> Cities that have fallen in rank over that period are Jacksonville, Indianapolis, Detroit, Boston, Memphis, Baltimore, Louisville, Milwaukee

> Detroit, once US' 4th-largest city, is #21 in 2015; in 2016 likely #23 (we'll see in a year), outranked by Seattle, DEN, El Paso, DC, Boston

> Philadelphia, #5 as of 2015, will probably be #6 in 2016, behind Phoenix. Yet Philly is growing! Up 41k since 2010

> Among cities with low/negative growth, Rust Belt stands out: Detroit, Cleveland, Toledo, St Louis, Buffalo.

> Cities with high growth are a mix of Sunbelt and high-performing urban cities like Denver, Seattle, DC, Miami, ATL

[RyanD]

Glass is going to start going up at 1144!



...and TWO crane bases at 16 Chestnut!!

[Denver Dweller]

http://www.denverpost.com/2016/09/19/world-trade-center-denver-new-rino-campus/

[Sam Hill]

Originally Posted by Denver Dweller

http://www.denverpost.com/2016/09/19/world-trade-center-denver-new-rino-campus/

I love their vision for this development. I get the sense they won't be cutting many corners. I'm excited.

[Denver]

Originally Posted by Sam Hill

I love their vision for this development. I get the sense they won't be cutting many corners. I'm excited.

I think this project will have some issues getting financing . No way a bank will lend to them without them raising at least 35% of the cost through equity. That's $70 million. I am hard pressed to believe that they will be able to raise this without brining on a well established developer. Further, no one on the development team seems to have any experience with vertical development of this scale making it more likely they will need another partner.

[Alchemist]

Originally Posted by Denver

I think this project will have some issues getting financing . No way a bank will lend to them without them raising at least 35% of the cost through equity. That's $70 million. I am hard pressed to believe that they will be able to raise this without brining on a well established developer.

According to their website, their partners are Formative, EXDO Management, Cushman & Wakefield, OZ Architecture, City Projects, and Saunders Construction. Furthermore, most of fiscal year 2017 will be devoted to designing, debt/equity discussions, and pre-leasing. So there is time.