Page 8 —
COLORADO REAL ESTATE JOURNAL
— February 4-February 17, 2015
Greater Denver
by Jill Jamieson-Nichols
A New Orleans-based transit-
oriented development group has
teamed up with a Denver com-
pany to advance development of
a 21-acre TOD site on the Gold
Line.
Located at the Clear Creek-
Federal Station, the Clear Creek
Transit Village is one of the larger
TOD sites on the Gold Line and
in metro Denver. Scheduled to
open in 2016, the Gold Line will
connect Wheat Ridge, Arvada
and northwest Denver to Denver
Union Station.
The TOD Group LLC pur-
chased the site, located just north
of Interstate 76 in Adams Coun-
ty, in 2009 and completed rezon-
ing in 2012 for up to 1,125 resi-
dential units and 250,000 square
feet of commercial development.
It recently entered an agreement
with Denver-based Trailbreak
Partners to finalize site and
infrastructure plans and iden-
tify builders to position the first
phase to break ground in 2016.
Plans will put into play
best practices from TOD sites
throughout the U.S. and Aus-
tralia, where The TOD Group’s
Dr. John Renne has studied, con-
sulted and written about transit-
oriented development.
“We envision it to be a resort-
like community, one that will
be the best of both worlds. You
can jump on the train and be
downtown in less than 10 min-
utes, and when you come home,
you can hop on your bike and
bike along the Clear Creek bike
path,” said Renne, director of
the transportation institute and
associate provost of urban initia-
tives at the University of New
Orleans.
“Clear Creek Transit Village
is a tremendous opportunity
to connect downtown with a
vibrant mixed-use communi-
ty in an emerging part of the
region,” Doug Elenowitz, princi-
pal of Trailbreak Parners, said in
a statement. “Bordered by Clear
Creek and the bike path, with
views of Lake Sangraco and the
Rocky Mountains, this site is
really unique.”
Dana Crawford of Urban
Neighborhoods Inc. has worked
with The TOD Group on the
project and said the site will be
“one of metro Denver’s most
distinctive destinations.” It’s also
a “cornerstone” inAdams Coun-
ty’s efforts to revitalize Federal
Boulevard, according to County
Commissioner Eric Hansen.
The first phase of develop-
ment will focus on residential
development, including town-
homes and, possibly, condos –
depending on what happens at
the Statehouse with regard to
construction defects legislation.
The TOD Group said it is in
discussions with leading green
builders about joining the team
to implement a sustainable,
high-amenity TOD at the site.
s
A conceptual drawing of Clear Creek Transit Village
by Jill Jamieson-Nichols
The drop in oil prices has some
folks in Denver’s office market
feeling a little edgy, but the mar-
ket isn’t likely to take a hit unless
low prices extend for a long peri-
od of time.
CBRE Managing Director Tim
Swan, addressing the issue at
NAIOP Colorado’s annual eco-
nomic forecast in Denver Jan.
13, said energy companies will
continue to operate at 2014 levels
this year, doing everything they
can to keep employees, “espe-
cially those who occupy office
space.”
“Overall, unless this is truly a
prolonged period of depressed
pricing for oil, we’re going to
see stable occupancy in Denver,”
said Swan.
Energy companies occupy
about 20 percent of the office
space downtown, compared
with 58 percent to 60 percent in
Houston, and only 5 percent of
the office space in metro Denver.
“Relative to oil, the good news
is that, unlike Houston, we’re
a diversified economy,” said
Swan, noting energy was third
in leasing activity over the last
two years, trailing the technolo-
gy and financial services sectors.
Swan, along with panelists Dr.
Glenn Mueller, professor at the
University of Denver’s Franklin
L. Burns School of Real Estate
and Construction Management,
and Dr. Steven Laposa, senior
adviser at Alvarez and Marsal
Real Estate Advisory Services,
provided a predominantly posi-
tive forecast for Denver’s com-
mercial real estate market.
In terms of occupancies, “Den-
ver sits at or above the national
average in all the property types
and is doing very well,” said
Mueller, who added that pricing
for all types of commercial real
estate has reached 111 percent of
its previous peak, making Den-
ver the best market in the coun-
try from that standpoint.
Hotel occupancy averaged 81
percent last year, compared with
64 percent nationwide. “Indus-
trial has been doing amazingly
well over the past year,” in part
because of the “pot effect,” but
also because of population and
employment growth, Mueller
said. According to Laposa, Den-
ver’s industrial market is likely
to see stable expansion through
at least 2018.
If there is a downside, it is in
the multifamily market. Mueller
believes multifamily has peaked,
and with new supply coming
on line in Denver, rental rate
growth is likely to slow. Laposa
called multifamily’s position in
the real estate cycle “confusing,”
but believes contraction is likely
through 2020.
The office market, he said,
will continue to expand, peak-
ing in 2016, while retail real
estate should show small, tenu-
ous expansion through 2017 and
moderate to equilibrium through
2020.
According to Swan, com-
mercial real estate’s underlying
fundamentals will continue to
improve in 2015, and market
sentiment will remain positive.
But with abundant capital in the
market, sustainable growth will
rely on underwriting discipline,
he said.
Laposa urged people to be cau-
tious as they move through this
cycle as, “The seeds of the next
bubble are sometimes planted
during recovery periods.”
s
their deals pencil out,” he said.
He said current gross lease
rates are in the $22.50 to $23 per sf
range. SKB will embark on a plan
to spruceupboth theoutdoors and
the interior of the buildings.
“I woulddescribe this asmore of
a core-plus holding, rather than as
a value-add opportunity,” Morean
said.
“We are going to take a B or
B-plus asset in an A location and
make it an A or A-minus asset,”
he said.
Former Denver development
titans Jay Roulier and Bill Walters
built Greenwood Corporate Plaza
from 1979 to 1981.
“I love that they built six basi-
cally identical buildings,” Morean
said.
“There is nothing cute about
them,” he said.
“They are very functional build-
ings with large floor plates.”
He said they would have no
problem accommodating tenants
from 2,000 to 10,000 sf, as well as
one space available of about 20,000
sf.
“This is what is known as a
‘sticky’ asset,”Morean said.
“That is, once a tenant leases,
they tend to stay here. That is
because whether they are down-
sizing or expanding, they can
almost always find a spot that fits
their needs.”
Mike Winn, who marketed and
sold the campuswith fellowCBRE
brokers Tim Richey and Chad
Flynn, said there was a lot of inter-
est in it frominstitutional investors.
“They liked it because it was
big,”Winn said.
“It’s rare to be able to buy six
buildings with over 600,000 square
feet in a landscaped, campuslike
environment. They liked that they
could buy six buildings at one
time, rather than having to buy six,
100,000-square-foot buildings.”
He agreed with Morean that the
campus is flexible when serving
the needs of tenants.
“When you have six buildings,
they can work with you by mov-
ing you around to another build-
ing, if necessary,”Winn said.
GreenwoodCorporate Plaza has
withstood the test of time, he said.
“It really has,”Winn said.
“They were ahead of their
time by building such large floor
plates,” he said.
The seller was Denver-based
Equity West Investment Partners
and its partner, San Francisco-
basedBroadreachCapital Partners.
Equity West purchased Green-
wood Corporate Plaza in October
2004 for $37.25 million, or about
$60 per sf.
It was only 30 percent leased
when Equity West purchased it,
while its occupancy rate is now
about 85 percent.
An aerial shot of the Greenwood Corporate Center, purchased by SKB
