Colorado Real Estate Journal - February 5, 2014
Sam Kasparek moved to Denver from Texas 2½ years ago to find apartment development opportunities for the San Antonio-based Lynd Co. He thinks he has found the ideal site in the heart of the Golden Triangle neighborhood at 1000 Speer Blvd., where an energy-efficient, luxury 16-story tower with 224 units is under construction. “ We’ve owned this site for 18 months” and began construction in late December, Kasparek said. “We’re making great progress.” Lynd teamed up with Cleveland-based Snavely Group on the tower, which is yet unnamed. “We’re simply referring to it as 1000 Speer at this time,” Kasparek said. He said he is thrilled to be developing their first project in the Golden Triangle. “When we were doing our analysis of various submarkets and we looked at the Golden Triangle, we really loved that submarket,” he said. “Of course, it is really close to downtown and it is across the street from the Cherry Creek bike path,” he said. “We also liked it because it is a real eclectic neighborhood and, demographically, it tends to attract renters who are a bit more mature and older,” Kasparek said. In other words, they aren’t necessarily competing for the young professional that so many other apartment developers see as their core demographic. “A high-rise rental project is generally looking for the more affluent renter,” he said. That is reflected in the average rents. “Our pro forma is to have an average rental price around $2,400 per month,” Kasparek said. The average unit size will be 1,068 square feet. The smallest units will have 485 sf and the largest more than 2,000 sf. The average size is skewing larger than a typical building under construction in Denver because of the mix of the unit types, he said. “Our mix is going to be around 45 percent two-bedroom units and about 55 percent one-bedrooms,” with a few three-story units on the top floors, he said, a well as some townhome-style units on the Cherokee Street side of the buildings. By comparison, many new buildings are 70 percent to 80 percent one-bedroom units, he said. Equity for the project is being provided by an institutional investor along with a construction loan provided by KeyBank Real Estate Capital and Capital One Bank. The tower is being designed by Page/Architecture and being constructed by Denver-based Milender White Construction Co. Coincidentally, Page was in one of the two small buildings that were razed to make way for the tower, Kasparek said. The building will include a west-facing, 7,000-sf outdoor deck on the sixth floor that includes a swimming pool with a view of the Front Range mountains. A five-level parking garage will have 285 controlled-access parking spaces as well as ample bike and ski storage and a dog-grooming station. The building also will feature an 8,000-sf resident amenity space on the ground floor that includes a fitness club, golf simulator, conference room with videoconferencing capabilities, and a resident lounge. Other building amenities include concierge services, a second resident lounge on the seventh floor overlooking the pool, with abundant outdoor seating and entertaining areas featuring multiple barbecue grills and a fire pit. Units will offer high-end finishes and stainless steel appliances including natural gas ranges, frontload washers and dryers, granite and quartz counter tops, solar window shades, hardwood flooring throughout, “exotic” millwork, glass backsplashes, floor-to-ceiling windows, and 8-foot entry and interior doors. The building will be LEED certified. “I would say a larger part of the population is becoming attuned to sustainability and saving energy,” Kasparek said. “For those consumers, it is increasingly important to them. But for most people searching for an apartment, it first starts with the zeroing in on a neighborhood and location and then they might consider other things like how green the building is. But the green movement is certainly growing.” Given the high level of finish in the building, the size of the units and the Golden Triangle location, does he expect an ultimate exit strategy could be to convert the units into condominiums? “That question comes up a lot,” Kasparek said. “All through our underwriting, we were asked if we planned to eventually do a condo conversion.” He said there are no plans to convert the building into condos at this time, “Our business plan is to build a for-rent project and the whole structure is that everything is working as a rental project,” Kasparek said. “That being said, if down the road the market changes and there is a huge demand for condos, who knows? But whether that would be five years or 10 years or 20 years down the road, I don’t know. Certainly, a lot of the buildings in the Golden Triangle are for-sale condos or townhomes.” But he does know that 1000 Speer will not be his only multifamily deal in Denver. “This is our first development deal in Denver, but Denver is a long-term market for us,” Kasparek said. “We love Denver and continue to look around for other opportunities. Denver is one of the most vibrant cities in the country and offers a rich lifestyle.” He said it is most likely that future projects will be in neighborhoods around downtown, but if they found a strong, suburban location at the right price, they would consider it. “Pretty much, though, I do think we will be focused around downtown,” he said. He said he likes the Highland neighborhood, but given the prices and the level of construction there, it is hard to find ground large enough and priced right that makes sense. “I really like the RiNo area, as it seems to be an up-and-coming neighborhood that is not as built up as LoDo or Union Station,” Kasparek said. “We just have to find the appropriate property (in Denver, not RiNo specifically) that fits what we are looking for.” Meanwhile, 1000 Speer is scheduled to be completed in September 2015, with the first units available in July of next year. Michael J. Lynd Jr., CEO of his namesake company, agreed with Kasparek that Denver is a longterm market for the company. “Denver is a long-term market for us due to its strong fundamentals and its desirability among consumers as a top live/work destination,” Lynd said in a statement. “This project continues our strategic initiative to develop special projects in urban settings as people and companies continue to migrate back to the urban core in search of a different lifestyle,” Lynd added. “Building residential high-rises is a unique skill, and we continue to find new ways to innovate and redefine the living environment and experience,” Lynd said. “This project will incorporate our best and freshest ideas to date.” This is the fourth high-rise apartment building development being led by Lynd. The first was the enV Chicago, which was awarded Multifamily Executive’s High Rise Project of the Year in 2011. Lynd is currently under construction on NINE at Mary Brickell Village, a 35-story luxury condominium tower in Miami, and the Bowie, a 36-story high-end residential tower in Austin, Texas.