Colorado Real Estate Journal - August 19, 2015
y Jill Jamieson-Nichols The developer of the Denver Design District will transform a 60,000-square-foot showroom building into creative office space, setting the stage for office development in the evolving mixed-use, transit-oriented neighborhood between Broadway and Interstate 25. “We’re looking to reposition this asset as a kind of suggestion of where we’re going in the future,” said Chris Waggett of D4 Urban LLC. The building at 575 S. B r o a d w a y will offer wide-open, sky-lit space with 24-foot ceilings. D4 Urban will begin gutting the interior next month. The Denver Design District is a 75-acre development on the south side of Alameda Avenue in the emerging South Broadway corridor, which is budding with new restaurants and retailers, including two natural-grocery stores. Known for an iconic yellow sculpture on the south side of the property, facing I-25, the design district currently has two light-rail stations and 900,000 sf of space, including interior design showrooms, a major retail center – Broadway Marketplace – and companies including Karsh Hagan and Quest Diagnostics. While it is ground zero for design showrooms, drawing interior designers, architects and builders from a seven-state region, the Internet is changing that industry. Design showrooms now are concentrated in two large buildings, which are 95 to 100 percent leased. That paves the way for redevelopment of 575 S. Broadway, which Kittie Hook, managing director of Newmark Grubb K n i g h t Frank, is marketing to users that are 20,000 sf and larger. Over time, the Denver Design Center will become a 10 million-sf mixed-use, live-work-play environment at downtown’s southern edge. A general development plan, urban design guidelines and a metropolitan district are in place, and the owners late last year bought out a distressed loan on the property. The design district’s first new ground-up development – the Denizen apartments – has been wildly successful, delivering the market’s first LEED Platinum units at the doorstep to the Alameda light-rail station. “The demand is insatiable. It’s unbelievable,” said Waggett, noting out-of-state renters are leasing units off the Internet, sight unseen. ValleyCrest Design Group is spearheading the district’s dense, urban design, which includes a future two-acre central park, a plaza for farmers markets and events, and a linear park along the light-rail line. While very much mixed-use throughout, the plan concentrates residential uses on the north, with office, including 1 million sf of new development, on the south, all interconnected with surrounding neighborhoods, the Broadway and Alameda light-rail stations, bus and car routes, and bike/ pedestrian paths. “The way that bicycles move through this area is very critical,” said ValleyCrest’s Eliot Hoyt, who noted a bike/pedestrian bridge across the lightrail tracks to the former RTD bus barn, which D4 Urban has under contract for 360-degree transit-oriented development, will allow bike access between Broadway and the South Platte River Trail. West Dakota Avenue will become a dense retail area, while East Center Avenue – which will become the 575 S. Broadway office building’s front door – will be re-energized. An effort to pursue LEED Platinum for Neighborhood Design certification is being contemplated – achieving it would make the Denver Design District the largest Platinum ND in the world. While, “Everything we do is signaling that the area is transforming and changing,” said Hoyt, the 575 S. Broadway building will be an “identity-changer.” Design elements, a new entry or entries for tenants, and windows will be created along Center Avenue. Outdoor seating areas also will be provided, helping activate the street. “It really lends itself to a really cool, creative space,” said Hook, who anticipates interest from architects, engineers and technology companies, for instance. Asking rental rates are $20 to $24 per sf triple net, a considerable discount to downtown rates, yet the district is close enough for people to feel like they’re part of downtown, Hook said. Waggett said the Denver Design District is a sort of southern version of Denver’s River North area, but with “better bones” because it’s adjacent to Broadway, across the street from West Washington Park and the Baker neighborhood and has two light-rail stations within a five-minute walk of anyplace on the property. In fact, much of the early interest in the 575 S. Broadway office building is from tenants “feeling the heat” of rising rents/prices and limited vacancies in RiNo, he said. “It (RiNo) is very appealing, but it’s pretty constricted. We think we offer a South Broadway alternative to that for the right user,” Waggett said. “I think anybody who comes here is going to come here because they understand the broader story.”