Villager Corridor Development & Real Estate

Covering business

A supplement to in the DTC & Denver south The Villager Newspaper

the

November 12, 2015

the

What a difference a year Special Report: Development (or 2) makes and real estate

7,328 million sq. ft. proposed in the Denver south area See pages 4-5

BY JAN WONDRA STAFF WRITER

The Denver south area has seen 10 consecutive quarters of declining office vacancy rates. Class A office space asking rent has risen for 19 consecutive quarters, averaging more than $24 per square foot, up 5.5 percent from 12 months ago.

Average Class A asking rent for the Denver south area is higher, running at $26 per square foot. Developers are bidding up land along the I-25 corridor, or, after years of patient waiting, finally moving long-anticipated projects forward. Buildings are being planned at a pace not seen in decades. This, coupled with worker shortages in key industries and rising home prices, send a clear signal that economic happy days have returned.

Of the 15 buildings delivered in the Denver metro area year-to-date, 73.3 percent of the space was preleased. Three of the five Q32015 key office sale transactions in the entire metro Denver area are in the Denver south area (sometimes referred to as southeast). No less than 17 projects are slated for the Denver south corridor (see center spread for details).

While some may not happen, the fact they are being actively considered, with land purchases moving swiftly and tenants lining up, signals times have changed.

According to the CoStar Office Report, the Denver office market

Community eagerly awaits light rail expansion

ended the third quarter 2015 with a vacancy rate of 9.8 percent; a numeric reality fueling projects that would not have begun even a few years ago.

“We’ve got spec projects coming out of the ground for the first time in years,” said Lynn Meyer, vice president of economic development for the Denver South Economic Development Partnership.

“The southeast I-25 corridor is full of energy,” said Doug Wulf, executive managing director and principal of Cushman & Wakefield. “It’s these hubs of vibrancy and activity, and it isn’t isolated to one product type. The energy here is a mix of elements, multifamily, retail, hotels and office space. There’s nowhere else in the entire metro area like the I-25 corridor. Office workers are used to an experience. They want accessibility to everything. Any development, office especially, but retail and multifamily, needs to be close to mass transit with vehicular access.”

The Denver south area is now a regional hub for seven Fortune 500 N O T H E R companies andA diverse business cat-S egories, including financial services, health care, engineering, and technology.

“Southeast Denver is a microcosm of the components of the national economy that are doing best,” said Wulf.

The booming activity stretches from Belleview and I-25, focused on

DIA and RidgeGate on the horizon

the 318,000 sq. ft. Prime West Companies project at 7001 E. Belleview to the RidgeGate projects south of Lincoln.

Close - yet so far away.

When the last speaker reThe corridor hasn’t seen this marked excitedly that a ribbon much activity in years, if not since cutting for the next light rail the heyday of the energy boom of the extension would be in “just 1980s. a few years,” a smile crossed “We’ve got only three parcels left Jack O’Boyle’s face with that on the west Village side of I-25,” said mix of excitement and irony Keith Simon, executive vp and dethat always comes in the hurryvelopment director of Coventry and up-and-wait world of publicdirector of development for Ridgeprivate partnerships.

Gate.

As mayor of Lone Tree He has been planning and develand later as a member of the oping the RidgeGate project in Lone board of directors for the ReTree for the past 15 years. gional Transportation District, “The pace has picked up. We’re O’Boyle, who now sits in the now turning our attention to the east literal and figurative audience Village, which is zoned city center. of RTD’s goings-on, had long We call it ‘UrbanScape,’ combining fought hard to get light rail into Lone Tree, especially into its mixed commercial, retail, entertainmuch-touted mixed-use Ridgement, office with higher density and Gate development. several forms of residential to adIt’sAre finally you about askingto happen dress all life stages.” sort of. enough questions In between those bookends, Cen“We’re aboutlooking the wayforward your to tennial will become home to what is continuing our relationship and wealth is managed?

U being C C called E S S the F Jones U L P A R T N E R S H I P District, a removing on to a full-funding development of the Jones Cable“Bright cam-input and In life, you question everything. grant agreement,” said Linda same should be true when it pus, including 1.8 million square feet brilliant solutions with The Gehrke, regional comes to managingadministrator your wealth.

Do you know what your broker is of office space and a fully mixed-usedazzling results. for the Federal Transit Adminbasing their recommendations on?

Do they stand by their word? Do you development on the 40 acre site. Our kind of people! istration. know how much you’re paying in First American State Bank fees? And how those fees affect your “It will be office, residential, $92 Ask million in federal your broker, and if you partnering with The returns? like their answers, ask again at retail, and dining,” said Centenfunding don’t needed to complete the Trice Jewelers.”

Schwab. We think you’ll like what our have to say. nial Mayor Cathy Noon. “We~ Ralph Klomp,extension Trice Jewelers Financial of Consultants the southeast line into RidgeGate is in the presiLearn more about our modern approach Continued on page 2 to wealth management by visiting the

dent’s 2016 budget, but must be approved by Congress.

A wide range of local stakeholders, including public officials and business leaders, met Nov. 3 at the Lincoln Light Rail Station, currently the southernmost stop in metro Denver’s ever-growing light rail system. It was not quite a groundbreaking—that’s expected next year—but more of an anticipatory celebration of things to come.

“Imagine three new light rail stations within walking distance of more than 500 acres of new mixed-use, higher-density smart development,” said Keith Simon, executive vice president of Coventry Development, which has spearheaded development on much of RidgeGate that boasts residences, shopping, retail and open space.

The R Line will eventually connect RidgeGate, the southernmost community in the immediate metro area, to downtown Denver and to the commuter rail that will take passengers from the bustling southeast corridor to Denver International Airport.

“This is one of the fastestgrowing areas for RTD,” said Director Gary Lasater, whose District G includes all of Lone Tree. “The 19.1 miles down the Continued on page 3

Lone Tree branch today.

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PAGE 2 | theCorridor.biz • November 12, 2015 the

DENVER METRO MARKET INDICATORS

Doug Wulf

The Denver south office vacancy rate of 9.8 percent is below the metro Denver average and is forecast to continue to drop over the next 12 months.

Graphics courtesy of Cushman & Wakefield

NET ABSORPTION, DELIVERIES & VACANCY

The days of indiscriminate real estate development are over

estate development, if we ever had any, are over,” said Wulf. “We can only speculate on which of the interchanges will be the most successful. But we know that thematically it is light rail and mass transit that is becoming the basis around which developers build and companies locate. So that they can attract the millennial workforce. To be successful, any development has to include, not just office, but retail and multifamily, and access to mass transit, as well as vehicular access. People want to live, work and play in the same area.”

Continued from page 1 see it as an activity center, something that people can really enjoy using.”

The vision that is our burgeoning light rail system continues to influence Denver south growth.

“The light rail extension is critical to the development of this community,” said Simon, who noted that they have waited 15 years for the 2.3 mile RidgeGate extension that broke ground last week. “We’ll have three light rail stops within commuting distance of our developments, one on the west, north of Sky Ridge, and two on the east side, city center and at the RidgeGate interchange.”

Farther north, the John Madden Company, one of the pioneering developers of the DTC and the entire Denver south area, plans the next stage of its Fiddler’s Green “horse shoe” near the Arapahoe Station, the Palazzo Verdi II. Also in Greenwood Village, the 11-acre FDIC parcel near the Orchard Station Subarea and Landmark is considered, according to key developers, to be one of the prime pieces for development along the entire corridor.

“The days of indiscriminate real A

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The Denver market’s strong office space absorption rate, which began in 2012, shows no signs of abating.

KEY COMMERCIAL SALES TRANSACTIONS 3Q 2015

Three of the five major commercial property sales during Q3 2015 were in the Denver south area.

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“Trust is the basis for a good banking relationship. That’s why we have selected First American State Bank for all of our important banking business.”

www.thekentwoodcompany.com 303.905.0744

Jay Davidson, First American State Bank, with Edie Marks and Bill Moore, Kentwood Companies

www.fasbank.com • 303.694.6464

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There’s nowhere else in the entire metro area like the I-25 corridor.

– Doug Wulf, Cushman & Wakefield Commercial Real Estate

November 12, 2015 • theCorridor.biz | PAGE 3

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It’s finally about to happen - sort of

Former Lone Tree Mayor Jack O’Boyle, left, shares a laugh with current Mayor Jim Gunning. Lone Tree has vied for years to get light rail into the city’s RidgeGate development, and groundbreaking on the extension is expected sometime next year.

Photo by Peter Jones Continued from Page 1 southeast rail accounts for the highest ridership of the rail lines in RTD.” Douglas County Commissioner Jill Repella said the region, especially Lone Tree, had

Dawn The

become a model for others.

“The things that they’ve accomplished in this area really set the bar high for many communities,” she said. “… The collaboration, when the county and city came together, it’s amazing what can happen, but the vision

is really coming from this community.”

The R Line connecting to the airport commuter rail is expected to open by the end of 2016. Work on the extension into RidgeGate will likely begin in the spring, pending federal funding.

Real estate and development on the rise in Denver south

BY MIKE FITZGERALD - PRESIDENT AND CEO DENVER SOUTH EDP The Denver south corridor is proven to provide an extensive inventory of both commercial and residential real estate for those looking to call the area home. The Denver south real estate market provides a wide choice of options from pristine office parks, green space to build on, flex space and industrial space on the corporate side to convenient apartment living on the light rail line, existing housing developments nestled among some of the best school districts in the country, and a diverse blend of new homes.

The amount of real estate development along the corridor reflects the quality of life, transportation infrastructure and friendly business climate that Colorado is extraordinary in. A large part of attracting people to the area is the dynamic economy, top employers and a wide variety of housing options for millennials and baby boomers.

As you drive down the Denver south corridor, you will see cranes in the air and construction underway in many places. Construction expanded during the second quarter of 2015 with over one million square feet of office, retail and specialty space in the Denver South region.

Construction continues on many projects in the Denver south region, including continued work on the third building of the Charles Schwab campus, which will span 187,500 square feet when completed, the 274,300-square-foot CoBank Center opening this month, One Belleview Station, with 318,000 square feet of office space, the upcoming Jones District in Centennial – a mixed-use development with apartments, office space and retail on 42 acres of raw land, and even more construction to come in RidgeGate, including com-

mercial and retail space, townhomes, courtyard patio homes and detached single family homes.

The region also has 35,000 square feet of industrial space under construction during the first quarter.

Forbes Magazine recently credited Colorado as being the No. 1 place for business and careers – much of which can be attributed to the real estate market and continued development of the region. The founders of the area had the foresight to plan the corridor with room to grow both out and up for future generations.

It is clear to many in the public and private sectors in Denver south that when the economy is evolving – businesses are competitive, profitable, attracting good paying jobs, expanding the tax base then many other dreams are possible.

The public and private leaders of Denver south have, over the past 30 years, encouraged a culture of collaboration to ensure this region has one of the best economies anywhere.

This culture of collaboration results in quality education, globally competitive companies, government leaders with vision and courage, a unique balance of high quality development parks, trails, open space, diverse cultural and recreation areas.

Finally – of use to remember with all the focus and attention on technology – real estate – land is still the basis of wealth – every day and everything has to be somewhere.

How Denver south leaders, public and privately, manage future prologue of development and henceforth will determine the quality of life. The Denver south region’s founders have provided a road map.

We look forward to theCorridor. biz showcasing the many projects along the south I-25 corridor and the continued growth and development of the Denver south region.

of

from the early files of The Villager With the “dawn” of thecorridor.biz section, The Villager is taking this opportunity to look back at the early development and history of the “I-25

With the “dawn” of theCorridor.biz section, The Villager is taking this If you have any photos or stories concerning the early years of “The Corridor”, please send them to Becky Osterwald at info@thecorridor.biz. opportunity to look back at the early development and history of the I-25 Corridor. The Villager has been covering the area for more than 30 years.

To contribute photos or stories of the early years of The Corridor, please send to Becky at info@thecorridor.biz.

Corridor”. Look for the next issue of thecorridor.biz in the September 24, 2015 issue of The Villager.

31 Years Ago Nov. 1, 1984 GV voters may determine Walters issue

Greenwood Village voters may get their say on Jan. 8 as to whether a piece of property, the key to the huge Walters retail/ commercial development, will be de-annexed from the city.

Monday night, the City Council met in a study session to go over a proposed schedule for the disconnection of a 120-foot strip of land at the northeast corner of the city and to review the possible creation of a new zoning category. The new category and disconnection would enable the Bill L. Walters Companies to develop 100 acres of land in and to the north of the city.

A six-month schedule for engineering the disconnection and the new zoning was discussed and unofficially agreed upon. The whole process could be cut short, however, by a negative vote from city residents on the disconnection issue.

Greenwood Cascades dedicated

Dedication ceremonies were held Oct. 25 for the Linclay Corporation’s first Colorado commercial development, the $50-million, seven-story, 320,000 sq. ft., Cascades office building at 6300 S. Syracuse Way in Greenwood Village.

Dedicating The Cascades was Richard Shepard, president, Linclay Corporation, the 17th largest diversified development firm in the U.S. The St. Louis, Mo. based corporation currently has a development budget in excess of $400 million with more than 3 million sq. ft. of office and retail space under construction in St. Louis and Kansas City, Mo., Cincinnati and Columbus, Ohio, and now Denver.

Shepard presented a ceremonial key to The Cascades to Betty Ann Dittemore, Arapahoe County commissioner. Fred Fisher, mayor of Greenwood Village, also participated in the building dedication.

Early view of the DTC from Old Images of Denver Facebook page, circa 1970.

‘Make developers pay’ Villagers tell county

A bill calling for a $3 million increase of property taxes in Arapahoe County met with approval from Greenwood and Cherry Hills Villages leaders at a public hearing of the Arapahoe County Commissioners Oct. 16, although the Villages representatives offered some stern advice in return.

More than 50 people attended the hearing, many of them private citizens not in favor of the proposal, which would double the mill levy from 1.5 mills in 1984 to 3 mills in 1985 and add about $60 to a Villager’s property tax.

The county commissioners will make their final decision on the increased mill levy at their Nov.

13 meeting. The City of Littleton has already voted in favor of the bill, but the City of Englewood is in opposition, saying that none of the projects proposed under the increased funding are in or near their city.

The additional money would be used to create more flood control, improve roads in the unincorporated areas of Arapahoe County, replace bridges and inadequate drainage facilities, and develop more roads into thoroughfares, some of which commissioners say are badly needed as a result of increased growth in the county. In addition, a large part of the increased property taxes will go toward a detention facility that is scheduled to be built near Centennial Airport. The county jail, ac-

cording to Commissioner Betty Ann Dittemore, is “court mandated.” If the increased mill levy is passed, Arapahoe County will have $6 million in property taxes in 1985, half of which will go toward construction of the jail and half toward the road and drainage projects.

Al Sateral of Cherry Hills Village said, “Many of the costs facing this county are for new developments. I don’t question their need for the expenditures, but it is putting a burden on people who are already established here.”

Saterdal recommended that the commissioners impose a direct assessment on the developers of new properties or impose a county sales tax to increase funding rather than raise the property taxes.

PAGE 4 | theCorridor.biz • November 12, 2015

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7.328 million square feet of office MARKET OVERVIEW space proposed for&the Denver New Buildings Development Sites south

Market Overview / Greenwood Plaza: Proposed New Buildings & Development Sites FDIC Land 11.4 Acres / 500,000 RSF Planned

eW ay

Cherry Creek Reservoir

225

Talk with Blair Madden Bui, CEO of John Madden Company, and you quickly realize you are

Granite Koelbel Site 600,000 RSF 2 Buildings Planned

Gre e

nw oo dP laz aB lvd .

Shea Properties Up to 120,000 RSF

Village Center Station II Shea Properties Up to 300,000 RSF Planned

CoBank (Build-To-Suit) Shea Properties 312,000 RSF Delivers 12/2015

SDM Site 7.6 Acres Up to 800,000 RSF Planned

us

New Buildings & Development Sites

Bambino Terzo The John Madden Company 250,000 RSF Planned

Peakview Ave.

One DTC West 75,000 RSF Breaking Ground May 2016 40% Preleased

Palazzo Verdi II 306,000 RSF Planned

t.

eS mit

INTERSTATE

25

Summit Place Hamilton-Titan Partners/ Transwestern Cherry Creek 215,000 RSF Reservoir Planned

IN T E R STAT E

225

Belleview Ave. Shea Properties Up to 120,000 RSF

FDIC Land 11.4 Acres / 500,000 RSF Planned Summit Place

Orchard Rd.

Shea 312,000 RSF Under Construction

FDIC Land 11.4 Acres / 500,000 RSF Planned Granite

One Belleview Station 315,000 RSF SDM Site Under Construction Delivers October 2016 7.6 Acres

INT ERSTAT E

25

Orchard Rd. Bambino Terzo SDM Site 7.6 Acres The John Madden Up250,000 to 800,000 RSF RSF Planned

Village Center Station II Shea Properties Up to 300,000 RSF Planned

Company

Planned

25

t.

County Line Rd.

195 Inverness Dr. 4.42 Acres

220,000 RSF Build to suit Miller GlobalArrow Electronics

Arapahoe Rd.

Artis Up to 10 Acres Berco Site Up to 250,000 RSF 8.3 Acres Planned

IX Miller Global 6.31 Acres Panorama IX Miller Global±140,000 RSF 6.31 Acres Build-to-Suit

The Jones District Berco Site 8.3 Acres 42 Acres Up to 360,000 RSF The Jones District 1,500,000 RSF Total 42 Acres Phase I - 180,000 RSF 1,500,000 RSF Total Planned The Edge

±140,000 RSF Build-to-Suit

Up to 360,000 RSF

The Edge Corporex 6.59 Acres ±175,000 RSF Planned and Designed

Concept Rendering - NE View

THE OPUS GROUP

Phase I - 180,000 RSF Planned

Corporex 6.59 Acres ±175,000 RSF Planned and Designed

Concept Rendering - NE View

THE OPUS GROUP

Artis Up to 10 Acres Up to 250,000 RSF Planned

United Properties 15+ Acres Built-to-Suit

220,000 RSF Build to suit Panorama Arrow Electronics

Axis Meridian Axis Meridian Shea Shea 26 Acres 26 Acres 340,000 RSF 340,000 RSF Planned / 3 Phases

Planned / 3 Phases

AERIAL PERSPECTIVE

Meridian North Shea Properties 15 Acres 500,000 RSF Planned

11-12-12

AXIS MERIDIAN

AERIAL PERSPECTIVE

BARBER ARCHITECTURE

MERIDIAN INTERNATIONAL BUSINESS CENTER

11-12-12

AXIS MERIDIAN

BARBER ARCHITECTURE

MERIDIAN INTERNATIONAL BUSINESS CENTER

Market Overview / Lincoln Avenue: Proposed New Buildings & Development Sites

Lincoln Ave.

I NTERSTATE

25

SHEA MASTER PLAN

Lincoln Ave.

Axis Meridian Shea 26 Acres 340,000 RSF Planned / 3 Phases AERIAL PERSPECTIVE 11-12-12

AXIS MERIDIAN

Meridian North Shea Properties 15 Acres / 500,000 RSF Planned

BARBER ARCHITECTURE

MERIDIAN INTERNATIONAL BUSINESS CENTER

9665 S. Maroon Circle ±70,000 RSF Planned

RidgeGate Point 10+ Acres 120,000 RSF Planned and Fully Designed

Meridian Blvd.

I N T E R S TAT E

25

Lincoln Ave.

RidgeGate Development Coventry 3,500 Acres Planned Up to 1,000,000 RSF of Office

SHEA MASTER PLAN

Building Perspectives

05.10.2013

RidgeGate Point 10+ Acres 120,000 RSF Planned and Fully Designed

RidgeGate Point 10+ Acres 120,000 RSF Planned and Fully Designed

Aerial photos and map courtesy Cushman & Wakefield

Building Perspectives

Meridian North Shea Properties 15 Acres 500,000 RSF Planned

05.10.2013

INT E RSTAT E

25

SHEA MASTER PLAN

sharing a visionary conversation.

“To lead into the future, we have to teach our kids to be creative. The John Madden vision isn’t just about putting up costeffective buildings. We’re approaching a paradigm shift, focusing on creative office space that is not just net zero, it’s net regeneration.

“As a woman in development, yes, I absolutely believe in the STEM (Science, Technology, Engineering and Math) aspects of our work, but I prefer to call it STEAM,” says the 38-year-old Madden Bui. “I love it, I love what I do. For this next phase of development, STEM has an ‘A,’ the visionary action, the creativity and innovation that has to come to the forefront of our work.”

The stance is not surprising, when you understand that Madden Bui is the granddaughter of the legendary Denver south developer John Madden, who was one of the principal architects of the Denver Technological Center and one of the driving forces behind the light rail vision that continues to transform the Denver metro area.

The family-owned business, John Madden Company, skipped a generation to place her in that role. “Most CEOs are not sure what is going on with millennials, but in my role I oversee four generations and answer to generations of my family,” said Madden

Arapahoe Rd.

United Properties 15+ Acres Built-to-Suit

Palazzo Verdi II The John Madden Company 306,000 RSF Miller Global Planned

Dry Creek Rd.

INTERSTATE

The Edge Corporex 6.59 Acres ±175,000 RSF Planned and Designed

Village Center Station II Shea Properties Up to 300,000 RSF Planned

Granite Koelbel Site 15 Acres / 600,000 RSF 2 Buildings Planned

Company

Bambino Terzo Palazzo Verdi II The John Madden Company The John Madden 250,000 RSF Planned 306,000 RSF

Keith Simon

Concept Rendering - NE View

312,000 RSF Under Construction

Planned

Dry Creek Rd.

The Jones District 42 Acres 1,500,000 RSF Total Phase I - 180,000 RSF Planned

THE OPUS GROUP

Koelbel Site CoBank (Build-to-Suit) 15 Acres / 600,000 RSF 2 Buildings Planned Shea

Up to 800,000 RSF Planned

Berco Site 8.3 Acres Up to 360,000 RSF

t.

S ite

em

s Yo

United Properties 200,000 RSF First Phase Under Construction Delivers March 2017 0% Pre-leased $19.50-$21.00/NNN

Artis Planned Up to 10 Acres Up to 250,000 RSF

n St.

25

Panorama IX Miller Global 6.31 Acres ±140,000 RSF Build-to-Suit

Miller Global 220,000 RSF Arrow Electronics Build to Suit Delivers 2018

Inverness Dr.

Hamilton-Titan Partners/ Transwestern 215,000CoBank RSF (Build-to-Suit) Planned

I N T ER STAT E

Belleview Ave.

Market Overview / Panorama & Inverness: Proposed New Buildings & Development Sites

Dayto

One Belleview Station 315,000 RSF Under Construction Delivers October 2016

rS

One DTC West 75,000 RSF Breaking Ground May 2016 40% Preleased

Developers weigh in

Executive Director of Coventry Development Corp. and Development Director of RidgeGate On density: “As a planner you work on these projects for a while, and eventually the day comes when you have to hand it back to your client. After planning RidgeGate, I’ve gotten to stay and build what I envisioned.

This is 3,500 acres, six square miles, that will take 40 to 60 years to build out. It will take us through a number of different market cycles and real estate development phases. So we need zoning flexibility for mixed use anywhere across the property in a series of planning areas. Our best guess about mixed use is that it will be predominantly residential, with more commercial oriented. It will include higher density forms of residential to accommodate all the life stages.”

On quality of life: “Equally important is our system of open space planning areas. A series of linear parks will protect the bluffs. It’s one of the great assets of the property. One third of the total acreage, 1,200 acres, will be protected forever. The philosophy: ‘No big yard of your own, you’ve got big public yards that appeals to millennials, and empty nesters’. It’s all laid down in the initial zoning.”

IN TE R STATE

STAFF WRITER

Sy ra c

MARKET OVERVIEW

BY JAN WONDRA

Yose

Give or take a few hundred thousand square feet, there is a staggering amount of development space proposed to come on line along the entire stretch of the Denver south corridor over the next several years. True, proposed is not reality. Some of it might not happen. But if even half of the 7.328 million square feet of space comes to pass in this corridor, it will be a building spurt unrivaled since the 1980s.

Can any market absorb that much? No one knows. Did anyone think 30 years ago that the amount of development that has actually occurred would become a reality? Some did.

When visionaries the likes of George Wallace, and Walter Koelbel, Bill L. Walters and John Madden, envisioned an alternative to the downtown financial district, they predicted the future as a place where people could live, work and play.

Their vision was unified around a place connected by mass transit that shared the I-25 corridor (still a first-in-the-nation solution) and including transit stops with density that welcomed a mix of incomes and lifestyles.

Executive Managing Director, Principal of Cushman & Wakefield On predicting needs: “Tenants today, office workers, especially millennials, are focused on an ‘experience.’ Accessibility to everything. Cities are focused

A developer’s vision of our future

multifamily, retail and hotels.

The diversity of housing product is very conducive to employers.

They need a broad demographic, not just executives and million dollar homes! You have to have a healthy combination of all three, which will benefit each other.”

este

STAFF WRITER

acres is going to be pivotal.”

On density: “It’s a fact that multifamily brings the retail activity. I don’t know which will be most successful, but Belleview, Arapahoe, Meridian, every single one of those interchanges has some components of office,

Putting the STEAM in STEM

Ch

BY JAN WONDRA

on maximizing tax revenue.

Combine the two and there has to be a balance, you can’t have exclusively single family.

You could say the poster child is the FDIC land that Century Communities has under contract south of The Landmark. That 11

Doug Wulf

November 12, 2015 • theCorridor.biz | PAGE 5

the

Building Perspectives

RidgeGate Development Coventry 3,500 Acres Up to 1,000,000 RSF of Office

05.10.2013

RidgeGate Development Coventry 3,500 Acres Up to 1,000,000 RSF of Office

Fiddler’s View, a seven-story conceptual project for the John Madden Co.

Bui. “It informs a unique perspective on the future.”

The company has always stood for the highest quality development, construction and design.

Its development work has long included the elements of public spaces, shared entertainment and cultural exposure, as evidenced by the Fiddler’s Green Amphitheater and the Madden Museum of Art, located at 6501 S. Fiddlers Green Circle in Greenwood Village.

Madden Bui says her priorities are quite clear.

“My primary focus has been property management,” she said.

“We have over 770,000 square feet of property under management and of course the vision is to complete the build-out of our Fiddler’s Green horseshoe. That’s another 550,000 square feet of space.”

But the future is moving forward into energy-efficient buildings, which is where net zero and net regenerative concepts come.

“Commercial real estate is not a green practice here,” said Madden Bui. “But there is an opportunity to meet our social responsibility, while creating superb work spaces and entertainment spaces.

Net zero buildings can replace the energy they use. Net regenerative structures take this a step forward; buildings that produce more energy than they use. That’s where we’re going. Yes, these cost more upfront, but frankly, it costs more

Blair Madden Bui, CEO of the John Madden Company, sees the future not just with net regenerative buildings, but buildings created as wellness systems. The concept for Fiddlers View is a five-story office structure with two more floors of what Madden Bui calles “creative office space.” to attract a new tenant than to retain a tenant, and we want tenant partners who understand our philosophy. And millennials are paying attention; they respond to it as much as they like density as part of their experience.”

Madden Bui says John Madden Company is exploring one step further, working toward con-

struction of well-built certification buildings.

“There is so much opportunity to build with well systems that help companies and people work and live better. For instance, by creating buildings built with low VOC (volatile organic compounds) that support respiratory health, cardiovascular health and digestive health. Paying attention to the source of the materials. We call it building with ‘DIRT,’ or ‘do it right the first time.’”

What is she excited about next?

“Our new buildings. The Palazzo Verdi II and Fiddler’s View, whichz will be across from the north entrance of Fiddler’s Green.

It will be five floors of office with two stories of creative office space,” said Madden Bui. “We’re planning to add an education center, and next year we’re planning to start a bike-share program.”

PAGE 6 | theCorridor.biz • November 12, 2015 the

How things get done

Cities reflect on collaborative development

Turning bare land into streets and roads, residential areas, office buildings, retail shopping centers and city centers, doesn’t happen by itself. In fact, navigating the maze of city, county, non-city services, metro special districts, sewer and water, energy grids, South Suburban Parks and Recreation, South Metro Fire and Rescue, school districts, and Library districts can sometimes resemble sausage-making. It gets done, but the process can be slow, messy and not always pretty to look at.

“The single most important thing for a city to do is understand that time is money,” said Centennial Mayor Cathy Noon. “We do an efficient process for people to get their plans in, get them reviewed and approved. We heard from our business community that that is what they want and need.”

The level of cooperation by and among the cities along the I-25 corridor was called out by developers, as both unusual and welcomed.

“Lone Tree really worked with us first in annexing the land that is RidgeGate into Lone Tree in 2000,

then on re-zoning the 1985 county development plan,” said Keith Simon, executive vice president and development director of Coventry and director of development for RidgeGate. “It developed subareas for the west village and it’s taken 15 years to develop that one square mile together. Not only did the city define areas for office, residential, commercial, but plans went through the RidgeGate Design Review Committee before going to Planning and Zoning and then to City Council.”

“Development is an ongoing function that cities must recognize.

It can last for at least 30 years and sometimes as much as 50 or more years,” said Greenwood Village Mayor Ron Rakowsky.

“Accordingly, development must be thought out in terms of how it fits each city’s mosaic of properties.”

One example of how business, development and government worked together to create an environment that everyone is thrilled with comes from Lone Tree.

“Cabela’s wanted to be in this region for several reasons, but initially they wanted to be close to Park Meadows Mall,” said Lone Tree Mayor, Jim Gunn, referring to the iconic new retail structure along the Lone Tree bluffs. “The city, the county and the developer all met with

Home Connection SUBMITTED BY THE COLORADO ASSOCIATION OF REALTORS

Q: I’m thinking about investing in some real estate. What should I

do and know to be successful?

A: Cable television programs like Flip This House, Income Property and Vacation House for Free have more people these days think-

The Village West plaza area near the new CoBank headquarters is nearing completion.

CoBank plans a grand opening on Dec. 16.

them. We went to their Nebraska headquarters and talked about their destination brand, the uniqueness of the setting along the bluffs and close to the regional trail system, the visibility they’d have along I-25. In the end, when the CEO saw the site, he said, ‘Wow, now I understand.’”

The proposed redevelopment of the Jones Intercable site in Centennial, as the Jones District, is another collaborative example. The 40-acre site was farm land along Panorama Ranch. Jones has owned it so long (it came with a lifetime residency legacy for the previous owner) that it had no city zoning.

“When Jones started on this redevelopment path, we said, ‘we’re flexible,’” said Noon. “It will be an activity center, with office, residential, retail, dining. We don’t exactly know where the buildings will be, but we’ve set limits on building heights, the office towers will be along I-25 and step down toward residential. We’ll have a nice green space in the center – a

gathering area for events. It could have a hotel or a lot of other things. It will depend upon marketplace needs and the developers.”

The Charles Schwab campus in Lone Tree is another example of municipal encouragement.

“During the initial deal-making, the time lines start to get compressed, but the end date remains the same.” said Gunn. “Often the tenants are on move-in time lines related to getting out of their prior leases. It can be big money. Both for Schwab and for Sky Ridge, we had to get involved with Southgate Water and Sanitation to get them served in a way to meet their deadlines. The city controls the inspections, but when it’s a third party, water, sanitation, the fire district, we’re dealing with collaborative timelines. Schwab told us that rarely has a city they’ve located to stayed with them all the way through as we have.”

“Cities must look forward and at the same time recognize that they must move thoughtfully and

insure that all consequences are considered,” said Rakowsky. “I point to Village Center at Arapahoe Light Rail station on both sides of I-25. This process started more than a decade ago and is coming to fruition at the present time. On the Village West side, the plaza could easily encompass the Cherry Creek Arts Festival without any closure of streets. On this, the city shares the John Madden Company vision of adding culture and events to public areas.”

“What you heard was a good reflection on the efforts Centennial has made in the last few years to streamline our new land use code and be open to ideas that people might bring to us,” said Noon, reflecting on positive comments by developers about the city. “New products are coming to us from developers. Our response is that we’re predicate able, but open to innovation. That’s our approach, be open and timely, so that business can be successful in our city.”

ing they can successfully buy, remodel, market and sell investment property to produce additional income and wealth. Many savvy investors have done quite well over the years by investing in residential real estate. But statistics show that more people “flop” at property

investment than succeed.

Experts advise that real estate investing should be seen as a process that may take many years to produce the wealth people are hoping to achieve. And while you do not need to have unlimited resources in order to become a real estate investor, you do need to have your own personal finances in order before taking on the challenges of finding, buying or managing properties.

There are a variety of ways to invest in real estate, some more handson than others.

For those who are comfortable with risk, the “fix and flip” approach may be appropriate. Flippers generally buy older, more distressed properties, rehabilitate or remodel them and then resell them to recover their investment and make a profit. The risk lies in knowing which properties to buy and in what neighborhoods. Much like investing in stocks or a business, you need to do your homework and planning or you risk not achieving your goal of increased income and security or worse, losing money.

Some investors are looking for long-term, stable income rather than the quick profit that comes from fix and flips. Buying houses to offer as rental properties can provide that steady flow of income these types of investors seek. There may be less risk with these types of properties but they will most likely require more ongoing attention from the owner as either a landlord or property manager.

A third approach would be where you invest by becoming “the bank” for others who will do the work of finding, remodeling, managing and selling the properties. This completely hands-off approach may appeal to investors who do not have the time to be more actively involved.

Whichever approach fits you best, the most important step is finding the right properties. The popular

real estate adage, “location, location, location,” applies just as well to investment as it does to owneroccupied properties. A vacation rental in the wrong location may not succeed no matter how nicely it has been remodeled. Buying a house to offer as a rental is in a high vacancy area could delay your ability to get it rented and begin recovering your investment.

Whichever approach you decide fits you best, knowing your likely expenses will be important to your success. In addition to the purchase, remodeling and capital expenses, you should plan on other expenses, either temporarily or ongoing, for such things as utilities, scheduled maintenance and repairs, periods of vacancy and legal and/or accounting fees.

Finally, your plan should include one or more exit strategies. Do you plan to hold the property for a certain period of time while its value increases and then sell? What if the housing market has a downtown?

Will you be able to keep up the mortgage payments and hold the property longer than you had planned?

If you are fixing and flipping, what happens if the property takes longer to sell than you anticipated?

As with all real estate purchases, consider working with a REALTOR who has the knowledge and experience to help you meet your goals. The REALTOR’s knowledge of neighborhoods, property values and investment strategies, combined with your own research and planning, will help you minimize the risk and maximize the benefits of becoming an investor.

This article was provided by the Colorado Association of REALTORS. Additional information about buying and selling real estate is available at www.Colorado REALTORS.com.

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November 12, 2015 • theCorridor.biz | PAGE 7

the

Owner-occupied attached housing adds to the bottom line

BY DOUG TISDALE EXECUTIVE VICE PRESIDENT, SOUTH METRO DENVER CHAMBER

T

he headlines tell the story. Apartment leasing rates in south metro, and throughout the region, have increased at unprecedented rates the last several years. You have to travel back a quarter century to find anything similar, and even then, the current rate overshadows what happened in 1992 or in 1982.

Rising at double-digit rates, rental prices place an increasing burden on our residents’ pocketbooks. One popular explanation is a classic supply-and-demand analysis: low inventory plus high demand equal higher prices. So the in-migration of millennials and downsizing by baby boomers strain the rental housing stock.

But wait a minute. Is there something else going on here? Is it really true that virtually none of these new young arrivals or these relocating adults want to own their home? Do they all prefer years of paying rent and getting back only the temporal satisfaction of a roof over their heads? Does no one want to create some equity to add to their bottom line?

It’s not surprising that the rise in rents coincided with another factor impacting the housing market. In 2001, the legislature adopted the Colorado Construction Defect Action Reform Act. Intended to address a few bad apples in the homebuilding industry, there were some positive results that flowed from that legislation. The matter seemed resolved.

Then in 2007 the Homeowner Protection Act was passed.

Among other things, HPA modified contractual rights between parties, voiding some contractual terms as “against public policy.”

That law presents an example of another law, that of unintended consequences. Following HPA’s passage, and eager enforcement by trial lawyers, condominium construction ground to a halt in Colorado. Condominiums became extremely unattractive for homebuilders. Of the multifamily housing units currently approved in the region (units that have gone through planning and zoning and are “on the books”), only about 2 percent are to be owner-occupied. The other 98 percent are rentals. Of the multifamily units actually built in the past two years, the same percentages obtain. Homebuilders are chilled by skyrocketing insurance costs, coupled with the fact that just three people on a five member homeowners association board can tie up the project in litigation (thus rendering all the units in the HOA almost unsaleable) over sometimes incredibly trivial defects.

When FasTracks was approved by voters, we promised that stations would be “diverse communities” with owner-occupied housing, retail/commercial

properties and apartments. We have failed in that promise. Having 2% or less of these transit -oriented developments as owner-occupied product does not

constitute diversity.

While I was on the Executive Committee of the Metro Mayors Caucus, we recognized that diverse housing options benefited our cities and fueled our region’s economic development. We understood that having residents who had invested in their community by buying housing would create stronger communities, and the opportunity for those owners to add to their bottom line by creating equity. And it fulfills “The American Dream” of home ownership. I often stated to my fellow mayors, “In 1862 Abraham Lincoln signed the Homestead Act; he didn’t sign the Rentalstead Act.” So the Metro Mayors created the Owner-Occupied Attached Housing Task Force, proposing modest fixes to the defects legislation that has crippled our

homebuilding industry: (1) requiring a majority of owners (not just a board majority) to approve filing a construction defects lawsuit; (2) providing full written disclosure to owners of the impact of filing such a lawsuit; and (3) prohibiting the deletion of any mandatory arbitration clause in the condominium declaration.

We presented this solution to the legislature in 2014. It failed, principally because of opposition from the then-Senate president.

We tried again in 2015. It failed again, because of opposition from the then-House speaker.

But mayors are creative.

They solve problems. So we began having our cities fix the issue that the legislature wouldn’t. To date, Arvada, Aurora, Commerce City, Erie, Lakewood, Littleton, Lone Tree, Parker and Wheat Ridge have passed some form of

solution regarding construction defect litigation, with Denver taking it up next week.

These ordinance fixes are not all the same. They do form a sort of patchwork quilt to cover the situation. And the recent Court of Appeals decision in Vallagio at Inverness vs. Metropolitan Homes (Colo. App. #2015COA65) (enforcing mandatory arbitration clause in condo declaration even after HOA amended decision to remove arbitration, without required developer consent) sheds a sensible light on this matter as well, subject to what our Supreme Court does on appeal.

But until the General Assembly chooses to act responsibly, our cities (and perhaps our courts) will have to do the job, adding to our collective bottom line.

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PAGE 8 | theCorridor.biz • November 12, 2015 the

All the right connections.

When you live in RidgeGate, you’re just a 30 - minute light rail trip from downtown Denver.

In fact, three more light rail stops are coming soon to our community. You’re also connected to a healthy lifestyle of walkable and bikeable neighborhoods, retail, dining and cultural venues.

And 1,000 acres of preserved open space are right at your doorstep. Enjoy the best of city life and nature. Just south of Lincoln Avenue in Lone Tree.

ridgegate.com A M O R E N AT U R A L A P P R O A C H T O N E W U R B A N I S M.