Colorado Real Estate Journal - June 15, 2016

RiNo is to Denver what Brooklyn is to New York

The River North Art District, better known as RiNo, has experienced a whirlwind of recent activity.

For example, Zeppelin Development, headed by RiNo pioneers Kyle and Mickey Zeppelin, recently announced it had paid $7.3 million for the Ready Mixed Concrete site next to its award-winning, mixed-use TAXI development on Ringsby Court.

They plan is to develop as much as 400,000 square feet on the site.

Another prominent family owned real estate company, Koelbel & Co., plans Catalyst HTI at 35th Street and Brighton Boulevard.

That joint venture is expected to be a game changer in the fledgling, but fast-growing health-technology business.

The area is becoming so trendy that a husband and wife team, which calls itself Iselo Investment Properties, has unveiled plans for $1 million townhomes as part of a mixed-use development along the banks of the South Platte River.

But it is not just the big deals that are changing the shape of a once-forgotten, gritty industrial area.

“If Denver were a big city like New York, Union Station would be Manhattan and RiNo would be Brooklyn,” said Billy Riesing, a broker with Pinnacle Real Estate Advisors.

Riesing has been spending a lot of time in RiNo recently.

For example, he recently sold a 14,273-sf parcel at 3423-3433 Blake St. in RiNo for $1.75 million, or $122.60 per sf.

The site is adjacent to a new pedestrian bridge and is less than four blocks from the 38th & Blake light-rail station, he said.

“I suspect that is a record-breaking price for that type of property,” Riesing said.

“It’s a great number,” he added.

The buyer was “able to make the deal pencil out economically” because he is convinced the RiNo boom is still in its infancy.

“The buyer probably will take 12 to 24 months before they break ground on anything,” Riesing said.

The parcel includes the Blake Street Glass building, which has about 2,500 sf, he said. The owners of Blake Street Glass were the sellers, Riesing said.

“Short term, they will lease it back” from the new owner, he said.

Long term, he expects that the new buyer will develop a mixed-use development that will have a retail component on the parcel.

In the near future, the 14,000-sf building at 324 Walnut St. will be officially hitting the market.

Riesing received the listing of the property at 3724 Walnut St. earlier this month.

The building is zoned C-MX-8, which would allow an eight-story building.

“It is a super sexy, two-story, fully renovated brick beauty that shows like a museum/restaurant hybrid,” according to Riesing.

It’s only a couple of blocks from the new 38th & Blake light-rail station, he noted.

In another deal, Riesing is listing a 20,300-sf site at Larimer Street in RiNo for $3.5 million.

The site includes a 6,039-sf retail/flex building occupied by the Kompound Training Center, a martial arts dojo, and 900-sf single-family home.

The land is zoned IMX-3, which would allow a three-story building.

“This site is about as sexy as it gets,” Riesing said.

“It is across the street from OZ Architecture and a lot of sexy stuff with new restaurants and housing is going on in the area,” Riesing said.

He described it this way in his listing brochure: “Located on the hottest street in urban Denver’s most sought-after submarket, 3034 Larimer is a pure reflection of the RiNo neighborhood’s history, charm, artistic edge and urban swagger.” A buyer may repurpose the existing brick building, which he said is “classic RiNo,” with a large garage door opening to Larimer Street, high ceilings and concrete floors.

“This would be a great retail development,” Riesing said.

“Triple-net leases on existing buildings are at a record high and certainly with new construction, retail leases are in the mid-$30 per square foot on a triple-net basis,” Riesing said.

And that is just where they are today.

“In three or four years, rents are just going to be going crazy,” Riesing said.

Typically, when brokers delve into the demographics of the area around a building they are selling, they break it down to a 1-mile, 3-mile and 5-mile radius.

Given the compactness of Denver’s version of Brooklyn, Riesing broke it into 0.1-mile, 0.5-mile and 1.5-mile tranches. The demographics reveal what is not only happening in RiNo, but also how it fits into the bigger picture.

There are a mere 85 people living within a 0.1 mile radius.

Stretch that to 1.5 miles, and the population grows to 45,736. That’s a 53,696 percent jump.

Of course, the 1.5-mile radius includes all of downtown and picks up some nearby neighborhoods.

Yet the population of RiNo is sure to grow with the current and future delivery of apartments, row homes, townhomes, retail and office, according to Riesing.

“It’s the most sought-after urban market in Denver,” Riesing said about RiNo.

“And the projected growth is a reflection of that.” Other News n Denver-based Bow River Capital, a lower middle-market investment firm, has closed its first dedicated real estate fund, the $64 million Bow River Capital Real Estate Fund I.

“We have been successfully investing in real estate for 20 years, and we are delighted to offer our investors a dedicated fund product that capitalizes on opportunities we see in the market,” said Blair Richardson, Bow River Capital managing partner.

The fund will seek opportunistic investments in a broad range of commercial and residential real estate by investing in property level equity, as well as performing and nonperforming real estate debt. It will focus primarily on investment opportunities in its “Rodeo Region,” a geographic area that encompasses the U.S. Rocky Mountains; the Midwest, South and Southwest; and portions of Western Canada.