Colorado Real Estate Journal - July 15, 2015
When Pat Broe developed the 20-story Country Club Towers and Gardens about three decades ago, it was a visionary and bold move. “It had been at least 10 years since any high-rise apartment had been built in Denver,” said Carl Luppens of the Broe Real Estate Group. “He was really visionary,” by building the 183-unit tower at 1001 E. Bayaud Ave., in the West Washington Park neighborhood. “He was the first to realize that people would want to live in these urban corridors and have all of the amenities that you find with high-rise living,” Luppens said. Recently, the Broe Real Estate Group, an affiliate of the diversified Broe Group, based in Cherry Creek North, broke ground on an even more impressive apartment community, County Club Towers II and III. (They are referred to as Country Club Towers II). The $190 million twin towers, each with 31 stories, are at 1001 E. Bayaud Ave. and 1091 E. Bayaud Ave., at the southwest corner of Speer Boulevard and South Downing Street. When completed, they will have 552 high-rise apartments and six garden units. The average size will be around 900 square feet. About two-thirds of them will be one-bedroom units. They are immediately west of the Denver County Club Towers and Gardens. Denver Mayor Michael B. Hancock was at the groundbreaking ceremony. He even took the controls of a giant earth-moving machine and dumped a truckload of dirt, instead of the typical ceremonial tossing of dirt from a shovel. Following the ceremony, Hancock said the units are the right development at the right place at the right time. He also said he is thrilled that the project will create more than 1,000 construction jobs. The towers are being constructed by Swinerton Builders. “We are delighted that the Country Club Towers II project will benefit the local economy by training and developing the next generation of Denver’s workforce, helping to fill the construction industry’s continuing need for a skilled workforce,” Hancock said. He said he knows that there is a great deal of anti-growth sentiment in Denver. However, growth is coming and people will continue to want to live in Denver, which will require housing in all price ranges, he said. As (City Councilman) Chris Nevitt so eloquently put it (at the groundbreaking ceremony), “A million people are coming here over the next 20 years and they will need a place to live,” Hancock said. He said he realizes not everyone can afford to live in these luxury towers, or other high-end apartment units being built in Denver. “I just came from a meeting in San Francisco with 350 other mayors,” Hancock said. “Every mayor, in every major city, is concerned about affordable housing,” Hancock said. “Affordable housing is something Denver is grappling with and must deal with. But we are not alone,” Hancock said. That said, Denver also needs luxury rental units, he said. “We need a diversified housing stock, both for sale and rental, in all price ranges,” said Hancock, who earlier had unsuccessfully lobbied state legislators to amend the construction defect laws, which have made it all but impossible for developers to build lower-priced, market-rate condos in Denver. Country Club Towers II will fill a need for those seeking luxury living, he said. “This is appropriate housing at this location,” the mayor added. “I support what Pat Broe is doing here.” The new towers, when they open between May 2017 and August 2017, will not only raise the bar when compared to the original tower that Broe built, but also as far as the new breed of luxury apartment buildings being built in neighborhoods such as Cherry Creek, downtown Denver, the Golden Triangle, RiNo and LoHi, Luppens said. “When Pat did the first building, it was pioneering, but it had to be somewhat utilitarian, considering the times,” as Denver was still struggling from a recession caused by collapsing oil prices, Luppens noted. The new towers, designed by Chicago-based Solomon Cordwell Buenz, will represent the type of high-rise apartments found in Manhattan, San Francisco, Chicago and other major cities, he said. SCB, for example, designed the 500 Lake Shore Drive apartment tower in Chicago, which has been praised for its clean architectural lines. “I think it will stand above its peers,” Luppens said about the Country Club Towers II. Rents will be at the market, Luppens said. The building’s pro forma is at $2.50 per sf, he said. “Who knows where rates will be in two years? Probably higher,” Luppens said. Some new buildings in LoHi and in Cherry Creek already are commanding rents north $3 per sf, with one building in Cherry Creek achieving rents for some units of more than $4 per sf. “We definitely will get some very high rents for our penthouse units,” Luppens said. Like other towers, he said the market for the towers will be from young professionals, millennials, empty nesters and even people who own homes in the mountains but want a place to stay near downtown Denver when attending a concert or sporting event. “We already have a track record of attracting those demographic groups to our existing tower,” Luppens said. Despite the boom of building luxury units in Denver, he isn’t worried about overbuilding. “Even though there is some new construction along the Speer corridor, when you look at the overall market, Cary Bruteig tracks more than 300,000 units,” Luppens said. “So really, we are adding relatively few new units to such a big base,” he said. Also, there are barriers to entry in the West Wash Park neighborhood. “There are very few remaining sites where you can build,” Luppens said. Also, since Broe has owned the land for about 35 years, his cost for the dirt is far less than any competitor would pay for land, which continues to set record prices, he said. Sean Broe, Pat’s son, noted that like the first tower, he also is 30 years old. He added that he learned to ride a bike along the nearby Cherry Creek path and has lived in the first tower. “This is my neighborhood,” he said. He couldn’t be more thrilled that Country Club Tower II is underway. “The Broe family and the Broe Real Estate Group are making a significant investment to develop Country Club Towers II and are showing our long-term commitment to Denver by offering residents high-quality homes in an attractive urban setting,” Sean Broe said. “The development, which will include ample parking and plenty of green space, is a striking enhancement to the existing property and the highly desirable Denver community of West Wash Park,” Broe said. “People want to live near downtown Denver, and we are pleased to be able to provide state-of-the-art, energy-efficient residences that are close to where they work and play,” he said. Indeed, Luppens said that Sean Broe touched on an important distinction between Country Club Towers II and most of other apartments under construction in Denver. “This is not being constructed to be flipped,” Luppens said. “This is a legacy property.”