CREJ - Journal

9 / 100

July 1-July 14, 2015 — COLORADO REAL ESTATE JOURNAL — Page 9
Greater Denver
by Jill Jamieson-Nichols
The office and retail space
within a Golden Triangle apart-
ment community recently sold
for $2.5 million, or $253.16 per
square foot.
Lincoln Terrace’s four units
totaling 9,875 sf sold to Plaza
Chapel Hill Ltd. and Plaza
Chapel Hill East Ltd. The
Sperry Van Ness team of Troy
Meyer, Kevin Matthews and
Dean Corey represented the
seller, Madrona Lincoln Terrace
Commercial LLC.
The fully leased property is
located at 501 Lincoln St. in
Denver. It’s a block south of
Speer Boulevard, near the con-
vergence of Speer, Broadway,
Lincoln and West Sixth Ave-
nue, one of the busiest intersec-
tions in Denver.
Tenants include Hensel
Phelps Construction, Thyssen-
Krupp, ATA Dental Center and
Semion Barbershop.
Because the units are part of
an apartment building, they
weren’t every investor’s cup
of tea, said Meyer. However,
“Because of the location and
the quality of the tenants and
product, we got a ton of inter-
est; 501 Lincoln St. was a very
sought-after asset and was not
on the market for very long,”
he said.
“The buyer was in a 1031
exchange and this property
was a perfect fit,” said Meyer.s Lincoln Terrace’s office and retail space was highly sought after, according to Troy Meyer of Sperry Van Ness.
tracks, is one of the largest parcels
left to develop in Denver.
When built out, the mixed-use
Alameda Station couldhave about
10 million square feet of residen-
tial, office and retail space.
To put that into context, down-
town Denver has about 35 million
square feet of office space.
D4 Urban always planned to
make the Denizen a LEED Plati-
num community.
“That was fully our design,”
Cohen said.
“First off, for us, in terms of our
corporate mandate, we felt it was
our duty to be sustainable and
build energy-efficient buildings. It
is just the right thing to do.”
Beyond that, sustainable build-
ings, which need to be airtight and
have plenty of insulation, are bet-
ter built, he said.
“It provides kind of a protection
from obsolescence,” Cohen said.
“Denizen is being built to a higher
standard.”
The U.S. Green Building Coun-
cil, which created and administers
the LEED rating, will certify the
Denizen as LEED Platinum after
it opens.
“We had to tweak it a bit to
get above LEED Gold,” he said,
adding that the chances of get-
ting LEED Platinum certification
appear to be excellent.
The added cost of going to Plati-
num is just about impossible to
estimate.
“It’s hard to quantify; I can’t give
youanexact number,”Cohensaid.
“I can’t tell you if it cost $100,000
more or $500,000 more. Was there
an additional cost? Absolutely. We
just don’t knowwhat it is.”
Part of the reason is because
each level of LEED certification
requires incremental, rather than
wholesale, changes.
“I can tell you the way the
building code exits today and as
standards are getting to be more
stringent, most new construction
inDenver can be built to LEEDSil-
ver standards with no additional
costs,” Cohen said.
Inaddition, theDenizen receives
LEED points simply by virtue of
being built next to a light-rail stop.
“This is a true transit-oriented
development and one of the best
TOD sites in Denver,” Cohen said.
It’s also too early to know how
much energy and money a renter
will save on utility bills, although
D4 plans to track that, he said.
Not only will tenants be sure to
have lower energy bills, but also
Cohen suspects they will further
save money by not owning cars.
“You can walk out your door,
hop on the light rail and be at
Union Station,” Cohen said.
“Starting in 2016, it will be 35
minutes from Union Station to
DIA, so you will be able to get
from the Denizen to DIA in 45
minutes, without ever having to
get in a car,” Cohen said.
Going forward, he said that he
expects the idea of not owning a
car will become even more popu-
lar with the millennial generation
and others, he said.
“Ten years from now, I think
there are going to be some pretty
dramatic changes in how people
use automobiles,” Cohen said.
If almost no one at the Deni-
zen is driving cars, there will be
no need for the current parking
garage, he noted.
The garage is being built so it
can easily be retrofitted for a “bet-
ter and higher use,” such as retail,
he said.
He is not sure if any other devel-
oper has thought of that, but he
said it is something that makes
sense.
“To build structured parking
costs something like $30,000 per
space, so it makes sense to convert
it to some other use, if people are
no longer using it for parking,”
he said.
The units at Denizen will range
in size from about 360 sf to 1,300
sf, with the average unit size being
690 sf.
They will lease for an average
about $2 per sf.
“They are far more affordable
than the new apartments being
built downtown in places like
Union Station,” where many new
apartments are charging north of
$3 per sf, he noted.
“It’s absolutely cheaper than
renting downtown,” Cohen said.
He saidhe expects a typical rent-
er will be someone who neither
wants nor needs ahuge apartment
unit, wants to live along light rail
and uses public transportation or
bikes whenever possible.
“Not only are youminutes from
downtown by light rail, there are
probably 30 or 40 restaurants and
bars along Broadway that you can
walk to,” Cohen said.
“It’s also easy to get on the bike
trail. You can live here very easily
without owning a car,” he said.
Also, D4 Urban was cognizant
of the demographics of the area
and wanted to develop a building
that made sense for the area.
“Themedianhousehold income
in the area is about $59,000, so we
wanted the Denizen to be a place
that would not stress pocketbooks
of people living here,” Cohen said.
In the first two weeks of leasing
the first building, 27 leases were
signed.
“Interestingly, the first six leases
were signed by people moving to
Denver from out of state,” Cohen
said.
“We’ve got renters from Texas,
Michigan and Rhode Island. It
really runs the gamut,” Cohen
said.
And while D4 Urban projected
that the Denizen would largely
attract millennials, “one of the first
tenants is a gentleman in his 60s,”
Cohen said.
How long D4 Urban will own
the Denizen is uncertain.
“It all depends on the market,”
Cohen said.
“People are paying a premium
for multifamily rental properties
these days and cap rates are very
low,” Cohen said.
“We are seeing a tremendous
amount of out-of-town inves-
tors looking at Denver and the
demand for Denver properties
only appears to be getting stron-
ger.”
Also, buyers have shown a
willingness to pay a premium for
sustainable, energy-efficient build-
ings, he noted.
So why is called the Denizen?
“Denizen means the habitat or
occupant of a particular place,”
Cohen said.
“What we are doing is creating
a community that brings together
public uses like light rail with real-
ly cool, fun buildings. So we are
creating the Denizen of Denver,
right?
“Plus, we really liked how the
name sounds.”s Another view of the Denizen
Shown is the courtyard in Denizen.
Shown is the interior of a Denizen unit. Tenants are expected to have low
utility bills, thanks to its LEED Platinum certification.
‘Because of the location
and the quality of the
tenants and product, we
got a ton of interest; 501
Lincoln St. was a very
sought-after asset and
was not on the market
for very long.’
– Troy Meyer, Sperry Van Ness