Allied Realty plans to soon start the demolition of rundown buildings near Speer Boulevard and Interstate 25 to pave the way for a 332-unit, $80 million luxury apartment community.
The development, called 2785 Speer, has been almost five years in the making and is by far the largest apartment development planned in northwest Denver, said Lauren Brockman, principal of the Denver office of Allied Realty.
Now, with the hottest apartment market in memory, he is ready to move forward on the two-building development.
“We’ll probably start demolition in about two weeks,” Brockman said today. “It will take about 22 months to complete construction.”
Brockman bought the first two acres of the 4.5 acre site in 2007. The property is roughly bordered by Speer, Alcott and Bryant streets, West 26th Avenue and the property line between the site and an existing gas station.
5 years in the making
“After we bought the first two acres, the market went sidewise and we decided that it would make sense to assemble a bigger site,” Brockman said. “I then assembled another two acres from nine different property owners. Later, I bought another half-acre. It’s very unusual to have a development of this size in an area so close to downtown. Most new infill apartment buildings are on pretty tightly packed sites.”
The community, he said, “will appear to be five stories on the Speer side and four stories on the 27th (Avenue) side,” Brockman said.
He anticipates initial rent rates will be at $1.92 per square foot, With units ranging from about 600 square feet to more than 1,200 square feet, monthly rates will range from about $1,100 to $2,300. The average sized unit will be 850 square feet, or about $1,600 per month. It will be about 60 percent one-bedroom units and 40 percent two-bedroom units.
“You look at Commons Park (near Confluence Park, off 15h Street) and they are getting $1.91 per square foot,” Brockman said. “There is nothing wrong with Commons Park, but is is 12 years old and this is brand new.”
He expects that after the initial leasing effort, “rents will stabilize at $2.10 per square foot.”
The development will be as nice as any of the new luxury apartment communities underway or on the drawing table in Denver, he said.
“Really, it’s going to be kind of like bringing Clayton Lane quality to Jefferson Park,” he said, alluding to the ritzy development in the heart of Cherry Creek North.
As part of the development, Allied will vacate Alcott Street and make it a private drive, which he said will make the area more pedestrian friendly. “We’re also going to vacate a funky little area on (West) 28th Avenue. The city asked us to do that because people get on it and then make 180-degree turns to turn around, so it is kind of a traffic hazard.”
The development will include a swimming pool, a two-story, glass-enclosed exercise area, and even a bocce ball court.
“The views of downtown are simply unbelievable,” Brockman said. “That is why we are enclosing the exercise area in glass with overlooking downtown. We wanted to take advantage of these spectacular views. And while it’s kind of hard to tell, we think the south-facing units and the north-facing units, also will have nice views of the mountains.”
Meeks + Partners is the architect and Swinterton Builders is the general contractors. The building will be LEED-certified. The development will include about 500 parking spaces, some of them underground.
Swinerton on board
“This is just an amazing project and we are proud to be participating in it,” said Scott Conrad, division manager for Swinerton. “My own view, is that this is a great time to be developing multifamily. Not only is the market unbelievably strong, but I think that we are going to be see inflation of commodities and labor in the future. And interest rates are obviously very favorable and debt and equity are available.”
Houston-based Meeks + Partners, described the development this way on its website: “Set in a redevelopment zone within easy walking distance of downtown Denver, this urban contemporary infill will create a vibrant and modern cornerstone for the transitional neighborhood. Aligned along historic North Speer Boulevard, the architectural team integrated and responded to the client’s specific needs to offer a dense, mixed-use product for this site.”
US Bank is the lender and the Amstar Group is Allied Realty’s equity partners.
Brockman said he anticipates the primary market for 2875 Speer will be the 22- to 35-year old.
“A lot of them will work downtown,” Brockman said. “They also might work in Cherry Creek, which is a straight shot down Speer. And we might have some young couples, where one works downtown and the other works in the Tech Center.”
He said he also expects that the development also will attract some divorced people and well as empty nesters.
“The nice thing is that there is one traffic interchange at Zuni and then you are at I-25, but you are just far enough from the highway that the noise isn’t overwhelming,” he said.
The community will include 10,800 square feet of ground-floor retail space. Brockman said he could imagine locally owned restaurants, such as as a pizza parlor, as well as non-chain operated businesses such as dry cleaners and coffee shops. “We think the area is pretty under-retailed. We don’t think we will have any problems filling the space. ”
The development is about a mile and a three-minute drive from the 147-units in three new buildings planned by RedPeak Properties in nearby West Highland.
“I think there is enough demand for RedPeak and for us,” Brockman said. “Plus, I think we will open enough in advance of RedPeak that we will be stabilized when they come on line.”
Indeed, he doesn’t share the fears of some observers that downtown and the areas around it, most notably Highland, are in danger of becoming overbuilt.
“If we were all going to start construction at the same time and open 90 to 120 days of each other, things would get pretty ugly,” Brockman said. “But all of these developments take a long time to move forward and not every one will be built. I’m not worried.”
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