DENVER | Main Development Thread #7

[TakeFive]

Hell Ya I agree - sort of

Originally Posted by laniroj

Many many sites would pencil if the zoning flood gates were to open and construction cost is a transitory issue (our Fed's favorite buzz word) that should eventually reach some sort of equilibrium. It will take time, 2 yeas is about how long it takes to get any project to a state of construction in normal times let alone with a new zoning code and surging inflation, which the construction/development industry has been dealing with for 7-8 years, not just 12 months.

We might want to expand on bunt's "On Paper" reference and if you want to take notes grab a pencil and some paper.




All of Denver is now zoned for up to four units on previously zoned single family lots/sites

Now would be a good time to sharpen your pencil.

To understand the WHOLE of Denver is to know the canvas of geography, demographics and history for all parts of Denver - of course.

Take Westwood, for example; nobody is falling over themselves to build in Westwood and that's a good thing as the people that live their need their lower housing costs. They like where they live and they like their neighborhood. It's their HOME after all.

So I learned today how you can expand an image on your smartphone by using your fingers, right? Let's expand the image to all of SW Denver. SW Denver looks like the best opportunity out there to me.

While I'm not specifically as familiar with SW Denver as other areas, the housing is all essentially the same given the period for when those homes were built. It seems totally logical given that land costs in SW Denver might be one-third (or even less) of what they are in more desirable Denver neighborhoods that builders might just rush in to take advantage of the much lower costs to build fourplexes.

Additionally, each area of Denver would have its own cost profile for building fourplexes and where it's much cheaper to build would likely generate the most activity. The more desirable areas would be popular but more challenging. Any viable sites would ofc go to the highest bidder. It would take patience and financial ability to make these opportunities work.

Quick Story

Yesterday, I'm driving around parts of Scottsdale, especially the more mature areas to better know my way around. Drove through several beautiful, beautiful areas. Not unlike central Denver the landscapes are so mature with trees, bushes etc. Everywhere I drove I couldn't miss the number of landscape workers out doing their job and this time of year is really pretty. These guys obviously don't make tech money but they are good jobs and many landscapers do manage to buy their own homes or afford a nicer apartment.

[TakeFive]

Originally Posted by Arapahoe

BREAKING NEWS

Amacon has paid their $1.2 million building permit fee and construction permit has been issued today.

I don't crack open a vintage bottle of wine until I see shovels in the ground.

But hot damn, this is sweet prologue music.

Originally Posted by wong21fr

But suburban subdivision development suffered greatly from the 2008 Financial Crisis and has never recovered due to a multitude of factors (tract homebuilder bankruptcies, less accessible capital, increased mortgage qualifications, etc.). So the US lost a large chunk of it's homebuilding capacity and it wasn't replaced by another mode of development (multifamily, shantytowns, a new frontier, etc.) in-kind.

True, initially lenders and builders were quite conservative coming out of the recession and as you point out due to stricter qualifications initial construction was largely upscale which hurt affordability. But many areas had excess inventories so it wasn't an issue early on. And over time those areas where suburban growth is popular, they have seen a resurgence in all types of home construction.

[TakeFive]

Music to twister244's ears

A quarter of Denver homebuyers are looking to relocate out of the metro
Dec 1, 2021 By Ethan Nelson – Data Reporter, Denver Business Journal

Around one in four Denver homebuyers are looking to relocate, and the top potential destination is Chicago, according to new research from Seattle-based real estate firm Redfin.

What's going on?

The itch to get out of dodge among Denver homebuyers is a result of the shakeup the pandemic brought to commuting and remote work, according to the report released Monday.

Sunnier locales – Miami, Phoenix, Sacramento and Las Vegas – are the country’s homebuyers’ top pick for potential relocation, according to the report.

Any negatives with respect to Denver?

Cities with high costs of living are seeing the most interest in net homebuyer outflow. Redfin cited San Francisco, Los Angeles and New York as cities with homebuyers most interested in relocating elsewhere. Denver homebuyers come in at No. 8 in the nation in terms of outflow, behind Chicago, Boston and Seattle.

But there's always a "However"

“Popular Sunbelt migration destinations including Phoenix, Atlanta and Austin will probably fall out of favor as skyrocketing home prices have rendered them less affordable,” Fairweather said.

Growing crime is also a consideration.

[Arapahoe]

Originally Posted by TakeFive

I don't crack open a vintage bottle of wine until I see shovels in the ground.

But hot damn, this is sweet prologue music.

Denver construction permits are subject to cancellation if work is not started within 60 days so I imagine Amacon has their ducks in a row to throw down $1.2 million for that piece of paper.

but yeah, shovels in the ground stat!

[SirLucasTheGreat]

Great news on Amacon. I drove by that site tonight and saw a couple of pickup trucks parked on it. Perhaps we might see groundbreaking soon.

Also, the former building where the new 14th and Court Hotel will be was just demolished within the past few days. In addition, the Evans West and Modera Golden Triangle sites are active although the former RMPBS building hasn't been fully demolished yet.

[Arapahoe]

Originally Posted by TakeFive

Music to twister244's ears

A quarter of Denver homebuyers are looking to relocate out of the metro

what a click-bait headline... lol, that should your first red flag. I looked at their report to see the data source.

The data behind these stats are a sampling of people who happen to use redfin.com for home searches; not actual home sales, and not relocation stats.

Of course media will pick it up as a very lazy way to get traffic and excite the gullible.

Redfin.com probably represents a small fraction of Denver home buyers, and of this unscientific sample, 25% looked at homes in different locales. Big whoop... who didn't browse home locations during the pandemic? I did.

Meanwhile in the real world of 2021, 75% of Denver homes sell in under 7 days, and 91% in under a month.

[TakeFive]

I really appreciate the knowledge you bring to this site

Originally Posted by Arapahoe

Denver construction permits are subject to cancellation if work is not started within 60 days so I imagine Amacon has their ducks in a row to throw down $1.2 million for that piece of paper.

but yeah, shovels in the ground stat!

BTW, I've lost much of my 'work-around' access to DBJ, especially CRE articles (others I can still access - I have no idea...) so you and others will have to pitch in with the hot news from the DBJ.


It's no biggie but:



I've made a two-year commitment (to myself) to do rideshare. Fortunately, I vey much enjoy getting out and meeting all kinds of people - from all over the country and the world. When I turn 76 if COVID hasn't taken me then I'll decide anew what my priorities are. In the meantime I'll at best be a part time contributor. I do hope to find some time to watch the Nuggets and Avalanche though.

----------------------
It turns out we aren't the only concerned citizens

RTD union calls Denver Union Station a ‘lawless hellhole’
Dec 1, 2021 by: Morgan Whitley - KDVR

DENVER (KDVR) — The union that represents RTD and First Transit, RTD’s largest fixed-route contractor, is alerting the community of unsafe and unhealthy conditions. The Problem Solvers obtained video of firsthand accounts of illicit drug use at Union Station.

Union Station is a staple of downtown Denver transportation and services shuttle buses, light rails and commuter and Amtrak trains. According to the union, in recent months RTD passengers and employees have faced loiterers, encampments and illegal drug use while boarding buses, trains and light rail.

What do RTD operators say?

“I had another operator tell me that she considers it a great day when nobody is seen smoking methamphetamine or using heroin on her bus,” Logenbohn said.

The union urges more to be done for the safety of RTD passengers and employers. “RTD passengers deserve better. The public that likes to enjoy lower downtown deserves better,” Longenbohn said.

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

Originally Posted by Arapahoe

what a click-bait headline... lol, that should your first red flag. I looked at their report to see the data source.

I admit I thought the click-bait might be fun food for thought. But (you know) how unimpressed I generally am with statistics so Point Well Made.

[coolmandan03]

Originally Posted by TakeFive

BTW, I've lost much of my 'work-around' access to DBJ, especially CRE articles (others I can still access - I have no idea...)

Using Firefox, there's a Bypass Paywalls extension. Works great!

[twister244]

Originally Posted by Arapahoe

what a click-bait headline... lol, that should your first red flag. I looked at their report to see the data source.

The data behind these stats are a sampling of people who happen to use redfin.com for home searches; not actual home sales, and not relocation stats.

Of course media will pick it up as a very lazy way to get traffic and excite the gullible.

Redfin.com probably represents a small fraction of Denver home buyers, and of this unscientific sample, 25% looked at homes in different locales. Big whoop... who didn't browse home locations during the pandemic? I did.

Meanwhile in the real world of 2021, 75% of Denver homes sell in under 7 days, and 91% in under a month.

Yeah, obviously it's meant to get clicks.

However...... I could see why some people are actually moving out of Denver for other parts of the country. Simply put, Denver has gotten ungodly expensive. For me, the tipping point was last year during the pandemic. Once I knew I could work remotely long term, I did a lot of reflection on whether or not I wanted to stay in Colorado. Then prices went up, and Chicago's prices have stayed relatively low. The other thing I experienced is several people I met in the five years I was in Denver have also left. It's a pretty transient city for millennials, unless they settle down out in the burbs with kids.

I just got back from a few months over in Europe (just in time for Omicron) and am thinking about getting a condo here while continuing to rent my place out in Denver. Maybe after a couple years I will cash out for a bigger place here. You gotta remember, most major cities in the country have experienced major real estate rises over the last decade. The coastal cities were always more, but now they are insane. And those other hip millennial destinations (Austin, Nashville)? They have started getting expensive now too. Chicago though? Even with higher property taxes, it's increasingly looking like a bargain.

At the end of a day, people are starting to look at whether Denver is worth the $600-$700k price of admission when there are other parts of the country where they may get more bang for their buck.

Also - Per the Union Station post, that shit needs to end now. That's a major public project that should stay pristine. The city should not allow a bunch of shitheads to sit around and shoot up like it's San Francisco.

[BG918]

Originally Posted by TakeFive

Growing crime is also a consideration.

This is definitely something that is trending the wrong direction in Denver. Homicides and shootings are way up and large parts of downtown that previously felt safe no longer feel that way. I know in my Denver neighborhood there has been an increase in burglaries and theft as well.

[laniroj]

Originally Posted by TakeFive

...True, initially lenders and builders were quite conservative coming out of the recession and as you point out due to stricter qualifications initial construction was largely upscale which hurt affordability. But many areas had excess inventories so it wasn't an issue early on. And over time those areas where suburban growth is popular, they have seen a resurgence in all types of home construction.

Good points but I believe missing the key factor: the suburban decline in production is due to the fact that land development fell off the map entirely starting in 2007 and lasting through roughly 2012.

Homebuilders need lots and generally focused pre-great recession on buying finished lots to build homes, not necessarily entitling land which is long, risky, and unpredictable work. Some of these big communities we see in the suburbs/exurbs take 10+ years from conception to shovels. Land development is also terrible for the publicly traded company earnings reports and balance sheets so they stay away. Land development is back in full swing but the momentum, as many rightly point out, shifted to urban center and brownfields. It's been picking up in the suburbs, but we still do have anywhere near the level of suburban sprawl/production that we've enjoyed continuously from 1900 to 2007, kicking the 1930's to the curb...

[Robert.hampton]

Looks like Novel Uptown passed design review last week. Really want to see renderings on that one -- I feel like Novel + Tryba is a combo that should yield a pretty stellar product.

Also really love the rendering for the Arbory up at Park Ave and Downing - a small project but a really creative one on a super awkward plot.



Same developer has plans submitted for a project at 17th/Washington

[COtoOC]

Originally Posted by Agent Orange

So Denver metro grew a bit over 17% this past decade and the same growth rate in the 00s. But in the 90s it was over 30%, so I don't think growth is the only factor. Also metros like Raleigh-Durham, Austin, Las Vegas, even Atlanta in the 90s and 00s grew even faster than that, and yet they didn't become significantly unaffordable.

Yeah, I wasn't assuming a higher population growth rate would be the only factor. Just thinking it could be a contributor.

[SirLucasTheGreat]

I've been interested in the two 30 story towers proposed near the Art Museum in GT. Here are rough concepts of the one at 12th and Bannock

[Arapahoe]

Originally Posted by SirLucasTheGreat

I've been interested in the two 30 story towers proposed near the Art Museum in GT. Here are rough concepts of the one at 12th and Bannock

wow, that would elevate denver architecture a bit

[Arapahoe]

Originally Posted by Robert.hampton

Looks like Novel Uptown passed design review last week. Really want to see renderings on that one -- I feel like Novel + Tryba is a combo that should yield a pretty stellar product.

Also really love the rendering for the Arbory up at Park Ave and Downing - a small project but a really creative one on a super awkward plot.



Same developer has plans submitted for a project at 17th/Washington

cool design. I don't see any empty lots there, are they tearing something down?

[jbssfelix]

Originally Posted by SirLucasTheGreat

I've been interested in the two 30 story towers proposed near the Art Museum in GT. Here are rough concepts of the one at 12th and Bannock

Oh good, someone finally straightened out the Jenga tower in Austin.

[wong21fr]

Originally Posted by Robert.hampton

Looks like Novel Uptown passed design review last week. Really want to see renderings on that one -- I feel like Novel + Tryba is a combo that should yield a pretty stellar product.

Looking at the site development plan it looks to be a pretty basic block building. Alexan Arapahoe Square comes to mind but with a driveway cut-out on Logan and mesh screening covering the parking.

[Agent Orange]

Stoked about that Bannock tower. Interesting design, but I'd be happy with any sort of height down in GT to add some variety to the skyline south of Colfax.

[midwestcowboy]

Originally Posted by Arapahoe

cool design. I don't see any empty lots there, are they tearing something down?

It's technically at Park and Lafayette. See aerial from the equity provider: