John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... 
The first five units at Tejon34 are priced from $799,000 to $900,000. An elevator can be added in one.
On a recent tour of the Tejon34 townhome development under construction at 3400 Tejon St. in the Highland neighborhood, I asked developer Ray Kawano if he was nervous about bringing units to the market priced in the $800,000 to $900,000 range.
“I think you always worry,” said Kawano, principal of River Meadow LLC. The five units in the first phase of the 28-unit development. The units, which range in size from 3,419 square feet to 3,576 square feet (when basements are included), are expected to be listed in Metrolist either Monday or Tuesday. The three-story units also include decks as large as 1,043 square feet, where people can enjoy stunning views of downtown and the mountains.
Later, during the tour of the units, which also sport sustainable features as Colorado timber from beetle-kill pine and a state-of-the-art heating and cooing system – I posed the same question to listing brokers Paul Tamburello and Rick Flanagan, principals of Red Chair Realty Advisors. In addition to being a broker, Tamburello has co-developed a number of buildings in Highland, including the Olinger Mortuary and the trendy Root Down restaurant. (For a recent Denver Post article about Tamburello, please visit this recent interview of him by Bill Husted.)
“Silent trend”
Their answer was that there is a “silent trend” of a flurry of expensive new homes that the northwest Denver neighborhoods of Highland/LoHi and West Highland have never seen before.
Paul Tamburello and Rick Flanagan of Red Chair Realty, stand in Tejon34, which they are listing.
“See that home there with the solar panels? That home reportedly has been appraised at $2.2 million,” Tamburello said, while standing the rooftop deck of Tejon34. “Another home ever there is worth maybe $1.4 million.”
Tamburello said there have always been the “one off” spec homes or renovations in the area.
“I’ve never seen anything like this,” Tamburello said. A lot of the homes are being built for owners, and are not appearing in the MLS, flying beneath the radar screen, Flanagan said.
“We are definitely seeing a trend where owners are building custom homes for themselves, (thus not hitting the MLS),” Flanagan said.
In addition, homeowners increasingly are adding pop-tops or additions; digging out the basements for more space; and removing homes to make them more comfortable, as well as bigger.
“There seems to be some strong energy in both east and west Highland, and we’re happy to be part of it,” Flanagan said.
But the magnitude of the wave of new construction surprised even Tamburello, who has been active in the area since the mid-1980s.
He and Flanagan pulled together a list of neighborhood homes with values of at least $800,000 for InsideRealEstateNews, in Highland and West Highland. Some are owner-occupied homes, some are giant renovations, and others are spec homes by developers, which will compete with Tejon34.
When InsideRealEstateNews analyzed the 30 or so homes they identified they had a total value of about $40 million – about $25 million east of Federal Boulevard and $15 million west of Federal.
“Amazing”
“That is amazing,” Tamburello said. “It is more than I expected. I knew I could come up with 10 or 15 homes right off the top of my head, but I didn’t realize there were this many,” and the dollar amount was so high. He estimated the completed value of one high-profile custom home under construction at Umatilla and 28th streets at $3 million. That home, which overlooks Interstate 25, can be seen by thousands of commuters on I-25 each day.
This custom home overlooking I-25 may be the most expensive home ever built in the Highland area.
Without a doubt, it is a conservative amount, he said.
“I know there are ones out there that I don’t know about or I am not counting,” he said. “I seem to learn about a new one every day.”
The new Cherry Creek
Highland and West Highland seem to be filling the role that Cherry Creek North did in the 1980s, when smaller homes were replaced with big, expensive duplexes, he said.
There is gentrification going on in the neighborhood, which Tamburello knows upsets some long-time residents.
But it is organic growth, which also has led to many of the best restaurants in Denver, as well as high-prices housing, he said.
“Gentrification comes whether you want it or not,” Tamburello said. “It’s not something you can really control. People have screamed at me: “Gentrifier!” But it’s not me. It’s the neighborhood.”
And unlike Cherry Creek North, many of the smaller, older homes will be saved, in part because of the down-zoning, of much of Sloan’s Lake and the overhaul of Denver’s zoning code, which will preclude the construction of many three-story units. In Cherry Creek North, many of the small homes were razed, as their was more value in the land than in the houses.
Flanagan said some people are still surprised that he would move from the Platt Park neighborhood to the West Highland area, as Platt Park is considered by many to be a gold-standard for a neighborhood. But he said increasingly he is seeing people even move from LoDo to the neigbhorhood, which has mature trends, is pedestrian-friendly, and one of the closest neighborhoods to downtown.
Tamburello said that many neighborhood organizations, such as Highland United Neighborhood and even the Highland Mommies, have done a good job to help maintain balance and diversity.
Small town feel
“In part, because of all the great work done by neighborhood groups such as HUNI, involving land-planning and historic overlays, the area, although urban, has a small-town feel,” Tamburello. “Someone could move from a small town in Texas, and feel like they’ve come home.”
He said what he is not seeing are recent buyers driving their new BMWs into attached garages, while ignoring the guy who is changing the oil on his car down the street.
Retail still missing
“The only thing I would say that we really need is more retail,” Tamburello said. “The commercial guys always say retail follows rooftop. But I also think retail follows rooftops in which the owners have a bit more disposable income, which we are seeing.”
Kawano, the developer of Tejon34, said that while he worries about duking it out with other high-end properties at a time when the overall real estate market is bouncing around the bottom, there is no place he would rather be.
“The untold story why I took on this project is that I grew up in Hawaii, and this reminds me of the neighborhood where I grew up,” Kawano said. “Where I grew up it was very diverse in every way – a lot of different ethnic groups, rich people, poor people and everyone in between. I love the mixture of architectural styles in this neighborhood. And people walked around where I grew up, and this neighborhood is very pedestrian friendly. Tejon34 is going to be a legacy project for us.”
If you enjoyed this story, you almost might be interested in Highland vibe electric, eclectic. For information on other homes in the area that are for sale or have recently sold, check COhomefinder.com .
Developer Ray Kawano is at Tejon 34 each day. He calls it a "legacy" project.
Contact John Rebchook at JRCHOOK@gmail.com.
The issue becomes the appraisals. Since all of these owner occupied new construction $1+M homes never actually sold, they can’t be used as comps. The 1st few units will need to be all cash deals.
We’re seeing the exact same phenomenon in East Wash Park. There are thirty holes in the ground and only about five of them are spec houses.
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