Colorado Real Estate Journal -
Veteran developer Paul Stann has had a hand in some of the most visible, prominent and successful projects in Denver. He helped complete the Palace Lofts in 1998 and followed with the Waterside Lofts in 2001. He later consulted on Clayton Lane in 2005 and played roles with the Flour Mill Lofts, Hotel Teatro, 16 Market Square, 1899 Wynkoop as well as the Four Seasons Hotel Denver and the Four Seasons Private Residences in Denver. Stann, however, said it is not the right time in the real estate cycle to be tackling a giant project. Instead, Stann currently is putting together an infill apartment development in the trendy West Highland neighborhood. Stann plans to start construction in late spring or early summer on a 30-unit apartment building at West 38th Avenue and Meade Street. The three-story building is on a 14,200-square-foot site zoned U-MS-3, under the revamped zoning code approved by City Council in June 2010. “These $6 million to $10 million projects are fun little deals.” Also, they can be financed, at a time when lenders are reluctant to take big risks on big projects, he said. “Banks have a lot of interest in these types of deals. There is not a lot of risk in them and they are excellent cash-flow vehicles.” Currently, Stann is talking to two banks. He expects the project to take 12 to 14 months to complete. He hasn’t yet named it, nor does he have elevations. “I’ve been talking to three architects about designing it, but I haven’t chosen one yet.” Stann expects rents to come in below what other new multifamily communities are charging in downtown and surrounding neighborhoods. “I would expect we would charge $1.45 to $1.55 per square foot in rent. This will be a very attractive alternative to young professionals and singles who want a fun place to live, but either can’t afford, or don’t want to pay, the $1.90 to over $2 per square foot some apartments are charging in downtown and near downtown.” The area is a big appeal, he said. “Residents can walk to all of the restaurants and bars on Tennyson Street, and it’s also very close to everything at 32nd and Lowell Boulevard,” the heart of West Highland, while being a 10-minute drive from downtown. RedPeak Properties is planning a much bigger apartment development near West 32nd and Lowell. That development would have three, five-story buildings and about 150 units. Stann, however, believes that there is more than enough demand from renters for both developments. And although they are only six blocks away, they have a different ambiance and vibe. “38th and Meade and 32nd and Lowell, really are two distinct market areas.” Bradford G. Pech is listing the property with fellow Re/Max Commercial Alliance broker Bill Struble. Pech said that Stann recently placed the property under contract, but an exact closing date hasn’t been set. “Paul really is the perfect buyer for this,” Pech said. The land is listed at $490,000, or $34.47 per square foot, although Pech said that the price likely be discounted a bit to reflect the expected cost of removing vacated gas tanks under the site. That cost has yet to be determined, or even if such environmental remediation is necessary, although both Pech and Stann said some cleanup likely will be required. Building the parking structure will require Stann to dig below where any vacated gas tanks may be located, Pech added. Pech describes the site as a “high-exposure corner lot,” which benefits from 30,000 cars passing it daily. “We’ve actually had quite a bit of interest in it,” from prospective buyers, Pech said. A number of people wanted to keep it as an auto maintenance shop, as a number of those establishments have been displaced by the widening of nearby Federal Boulevard. Pech said he thought it might be a perfect location for a mixed use development with retail on the ground floor. However, he noted that a nearby condominium project has struggled to lease its ground-floor retail. “Paul probably does have a better idea of making it more of a 100 percent rental property. He can convert them into condos at a later date, if he wants, if the market is there.”