The real estate market in Denver is hot, with home prices continuing to climb and inventory at an all-time low. This is particularly true for condos, as there are very few developers actively building condos in Denver today. In fact, in 2016 and 2017, condo construction represented just 6.7 percent of the residential homebuilding activity in the Denver area, according to Metrostudy.
Despite recent reforms by Colorado lawmakers encouraging condo development, many developers, as well as investors and lenders, have been slow to get on board.
However, we feel the demand for condos will only continue to increase, particularly among millennials who want to own their homes and baby boomers looking to downsize. So, when considering how to develop the last parcel of our land in the Union Station neighborhood redevelopment, condos were an easy decision and have proved to be the right one.
The Coloradan, a 334-unit condominium development, brings our commitment to the redevelopment of this part of downtown Denver full circle. Our redevelopment of Riverfront Park, the 23 acres between the former freight line and the South Platte River that includes 1,859 residential homes, often is cited as the catalyst for the redevelopment of Union Station. As co-master developers of the Denver Union Station area, we have continued to build on that creation of place with the addition of engaging public spaces and great places to work. The location of the condo project, between the new Whole Foods and the historic station, completes the circle of development around the iconic Union Station train platform.
As the first opportunity to own a piece of the Union Station neighborhood, we knew the standards for our building would be incredibly high for buyers and the community as a whole, so we wanted to ensure the project was timeless in its design but still very unique, so that it would stand on its own but still be a part of the overall fabric of Denver. To us, that meant integrating with Denver in three key ways – connection, inclusion and giving back.
The asset functions as a connection between Denver’s new and exciting area and the larger city around us that has been growing and evolving over the past several decades. That occurs not only metaphorically, but also physically, with a connection to the bridge that spans the tracks of the train platform, connecting to the grand stair and into Lower Downtown. More than a benefit for residents, this also is an engaging connection for people moving between the Central Platte Valley and the rest of downtown in either direction.
The desire for inclusion resulted in the decision to include affordable homes. The Coloradan is being constructed under the previous Inclusionary Housing Ordinance, with 10 percent of the residences dedicated to providing affordable housing. While developers had the option to pay a fee in lieu of development, we believe that the significant public investment in Denver Union Station means that Denver’s new epicenter should have housing options for everyone, ultimately shaping a stronger Denver and providing hard-working residents the opportunity to take advantage of all that the Union Station neighborhood offers. Today, all 33 affordable homes are under contract.
Finally, our mission of giving back led us to create Union Hall, a nonprofit entity located on the ground floor that will serve as the center of the community. The multipurpose space and associated programming will provide a platform for Denverites and visitors to engage in enriching and educational creative experiences and will serve the neighborhood and Denver as a community-focused arts space and culture concierge, while providing opportunities for both emerging and well-known artists. Union Hall represents a new model for arts and culture spaces being integrated into mixed-use development projects and will be the first dedicated, noncommercial, noncollecting exhibition space integrated into a private real estate development in Denver.
Even with our ideal location and grand visions, developing the project has faced its challenges. It’s a difficult time to build, with high construction costs and labor shortages. And we must be vigilant in ensuring that the asset stands the test of time. Right now, we are new and exciting, but residents will live here for years to come and we must create something that continues to provide value.
Fortunately, the project seems to be resonating with buyers, as we are currently 85 percent sold out and will feature retail tenants including A Line Boutique, Kaffe Landskap, Blo Blow Dry Bar, Pure Barre, Slifer Smith & Frampton and Revolution Dry Cleaners.
While it may not have been the popular decision to build condos in the current market environment, we have seen firsthand that developing the right product in the right location that serves the needs of today’s buyer was definitely the correct one.