Colorado Real Estate Journal - May 4, 2016
The 15-story Mezzo was billed as the first high-rise apartment tower in Denver when it opened in 1953. At the time, it was not the Mezzo (pronounced “metzo”). It was widely known as the Sherman Tower until a previous owner changed it to Mezzo almost a decade ago. Today, it still is one of the tallest rental buildings in Capitol Hill. And with 316 units, it has the most units of any single rental tower in Capitol Hill, according to research by Cary Bruteig, principal of Apartment Appraisers & Consultants. “I think it is safe to say it is the biggest apartment project in Capitol Hill,” Bruteig said. In its early years, it was considered such luxury living that people who stayed there included Eleanor Roosevelt, the wife of President Franklin Roosevelt, and actors Ethel Merman and Vivian Vance. Two real estate experts said they had heard that the late hotel magnate Leona Helmsley, known as the Queen of Mean, had stayed there, although that could not be confirmed. Of course, there are taller apartment buildings and communities with more units in other rental communities in nearby Uptown and Cherry Creek. Late last year, with little fanfare, the Mezzo at 901 Sherman St. was sold for $62.5 million. The buyer was Virtu Investments, based out of Larkspur, California. A Holliday Fenoglio Fowler team that included Jordan Robbins, managing director, and Jeff Haag, associate director, from the Denver office listed it. HFF, in its listing brochure, described the Mezzo as a “rare high-rise offering” strategically located in Denver’s “It” neighborhood of Capitol Hill. The sales price equates to $197,790 per unit and $325.85 per square foot for the 1901,803-sf building. “When you start getting close to $400 per square foot, that is a pretty big number,” Bruteig said. Smaller, older buildings, however, have sold for more per door than the Mezzo. Capitol Hill has been one of the best performing submarkets in Denver. “I was just looking at Capitol Hill numbers yesterday and I was surprised how high the rents are, even though it has a lot of older buildings,” Bruteig said. The average apartment for rent in Capitol Hill was built about 50 years ago, he noted. Since the Mezzo was built, the city of Denver’s population has grown about 60 percent, while the entire metro area has grown by sixfold. Robbins said a number of prospective buyers wanted to buy the Mezzo. “I think it is really a neat deal,” Robbins said. “You just don’t see that many high-rises go on the market.” The location is as good as it gets, yet the prices renters pay is a fraction of what a renter would pay for a newer building in today’s market, he said. “It’s a great alternative to a newer building,” Robbins said. He said he received offers from investors on the West and East coasts, as well as local investors. The seller, Redhill Realty Investors, had invested about $10.5 million in the property. “It really has some nice finishes and nice amenities,” Robbins said. Records show that Redhill paid $33.5 million for the Mezzo in 2007. In 2005, it had sold for $23 million. “In its entire history, it hasn’t traded all that many times,” Robbins said. According to a Denver Community Planning and Development report, Sherman Tower (which in the early days may have been called Sherman Plaza) was built by Nicholas G. Petry. However, Petry died in 1950, three years before the building was completed. One real estate broker familiar with the building suspects it was built by his son, Nicholas R. Petry. Exactly why a developer would tackle such a big project at that time is a bit of a mystery. “It must have been a massive project for that time,” Bruteig said. Capitol Hill was not the hot spot it is today. “My guess about Capitol Hill in the 1950s is that it was filled with rundown mansions that had been converted to TB sanitariums or apartment houses,” said historian Tom Noel. “Suburbanization was setting in and respectable folks were fleeing Capitol Hill,” said Noel, a professor of history and director of public history and preservation at the University of Colorado Denver, who is known as Dr. Colorado, for his wide and in-depth knowledge of Denver and Colorado history. One broker, who had sold the building before it was renamed, said that it is remarkable that it was never converted into condominiums. Maybe even more remarkable is how well the Mezzo has withstood the test of time. “When you look at it, it doesn’t really look like it was built more than 60 years ago.”