Colorado Real Estate Journal - June 17, 2015
Great Western Bank stepped up to the plate to finance the 100- room Source Hotel that Mickey and Kyle Zeppelin plan in the upand-coming RiNo neighborhood at the edge of downtown Denver. The banking company, with about a $1.4 billion market cap, is based in Sioux City, South Dakota. It has a reputation as being one of the leading agricultural lending banks in the nation. More than 25 percent of its outstanding loans are in the ag business. The $29 million loan Great Western will be providing to the Zeppelins for the $41 million Source Hotel along Brighton Boulevard is the type of loan that helps balance the company’s ag business. “The ag sector has seen lower growth but the benefit of GWB is that we are also a strong commercial and industrial lending bank. We have markets in Arizona and Colorado which have seen tremendous growth which help offset slower ag markets in the Midwest,” Ken Karels, president and CEO of Great Western said in a recent interview with Northwestern Financial Review magazine. Great Western has 162 branch offices, including offices in Lower Downtown and Cherry Creek North, where Piper Pierce is the vice president of business banking. She was thrilled to make the loan to the Zeppelins for the 65,000-square-foot Source Hotel, which is scheduled to open in 2017 next to the Source artisan food market at 3550 Brighton Blvd., which also was developed by the Zeppelins. “One of the reasons the Source Hotel project is appealing to the bank is due to the primary players involved that each add their own areas of expertise,” Pierce said. She also likes that the LEEDcertified hotel, designed by Dynia Architects, will include 25,000 sf of marketplace amenities. “The mixed-use aspect of the project will provide sustainability and appeal for a wide demographic of travelers seeking upscale accommodations and locals who have already fallen in love with the Source Marketplace and the diversity that the RiNo District offers,” Pierce said. She also likes what is happening in RiNo. “There are many exciting movements taking place in the RiNo District that we feel will create demand for future Source Hotel patrons,” Pierce said. “The migration to the area of both businesses and residents coupled with the connectivity of mass transit seem to provide fundamentals that will allow the revitalization of this area to be sustainable,” Pierce said. This doesn’t mark Great Western’s first loan to the Zeppelins in RiNo. In August 2014, Great Western Bank worked with the Zeppelins on financing their 48-unit multifamily complex, Freight Residences, in their Taxi campus. Kyle Zeppelin, who was a pioneer in RiNo when he and his father, Mickey, launched the mixed-use Taxi development in the neighborhood, said the area is only getting better. “RiNo is booming with major new projects and public infrastructure, including construction of the station that is the last train stop before downtown along the DIA line and the first dedicated bike lane in the city on Brighton Boulevard,” Kyle Zeppelin said. “RiNo is also the highest concentration of new economy jobs and the largest art district in the state,” Zeppelin said. The Source Hotel is the perfect complement to RiNo, even though some observers believe the neighborhood is not yet ready for a hotel. Zeppelin could not disagree more. In fact, not only is the Source Hotel a good fit for RiNo, but also it is an important addition to the urban fabric of Denver, according to Zeppelin “Grounded in the creative culture of RiNo, the Source Hotel provides the first true lifestyle hotel in the city,” Zeppelin said. “It is part of the larger culinary complex at the Source, which includes a handpicked group of 30-plus of the most accomplished artisans in the state,” he said. “Brooklyn, Oakland, Austin, Portland all include examples of lifestyle-driven hotels outside central downtown that serve as cultural destinations for out-oftown visitors wanting to experience the most interesting things that a city has to offer,” Zeppelin said. The Source Hotel is another pioneering effort by the Zeppelins. Kyle Zeppelin believes that, once again, its success will prove naysayers wrong. “As you know, we have never followed the herd when it comes to development,” Kyle Zeppelin said. “When Mickey bought the Taxi site 15 years ago, the consensus was that it was too early for RiNo. Maybe it is more fair to say that RiNo wasn't even on the map,” Zeppelin said. “When we announced the Source three years ago, it was, by many accounts, too early for RiNo,” Zeppelin continued. “The success of the Taxi campus and the Source have proven to us that it isn't too early for RiNo,” he said. “The neighborhood is ready for more change.”
Eric Tupler and Matt Gangaware, senior managing director and real estate analyst, respectively, for the Denver office of Holliday Fenoglio Fowler LP, or HFF, recently arranged $20.35 million in acquisition financing for a portfolio consisting of two newly built, 100 percent-leased, single-tenant industrial buildings totaling 643,386 square feet in Kansas and Kentucky.