The new company, 8z Rentals, provides services to assist large and small investment property owners, as well as a variety of services for clients looking for a rental home.   8z Real Estate was founded in November 2009 to serve buyers and sellers in Colorado.

Both companies share one founder, Lane Hornung, who in addition to being the co-founder of 8z Real Estate is its CEO and President. 8z Real estate is a sponsor of InsideRealEstateNews.

In addition to Hornung, Forrest Noble ils a founder of 8z Rentals.

Noble has more than 25 years of property management experience in Boulder county managing as many as 82 properties in his personal portfolio by the late 1990s. He has also been a licensed real estate broker since 1990.

With his background, Noble became well versed in  services that a property management company can provide to ease the hassles for both small and large portfolio landlords.

8z Rentals features the latest technology to connect tenants, or “residents” as the company prefers to call them and property owners.

Free listings

Owners who were otherwise just planning on putting a ‘For Rent by Owner’ sign out can list their property for free on 8zRentals.com, only paying if the resident with the new lease came through 8z Rentals.

After the lease is signed, 8z Rentals’ property management services utilizes cutting-edge technology with easy online rent collections and disbursements, maintenance requests and year end statements prepared by a certified public accountant.

One of the most frustrating aspects for landlords is managing repairs and vendors.  8z Rentals has identified the best local vendors to work with, enabling a quicker repair, whatever it is a leaking pipe an electrical problem or anything else. There are no mark ups on these maintenance costs to the property when 8z Rentals coordinates them.

As vacancy rates shrink across the state, the hunt for a rental home can be all the more time consuming for families looking to make a quick relocation to Colorado and need to identify their rental. As previously reported by InsideRealEstateNews, the first-quarter apartment vacancy rate in Colorado was 5.2 percent.

8z Rentals also has services for resident representation, much like the services frequently found in large cities like New York City, San Francisco and Chicago.  These services vary in price but include neighborhood and available home tours when you visit, as well as help from afar such sending you room measurements, floor-plans and photos of the properties that most interest the new resident.

Using 8z Rentals helps consumers  avoid the all-to-common rental scam increasingly found on sites such as Craiglist, which can waste time and money and be frustrating for investors trying to identify out-0f-state properties.

8z Rentals is headquartered in the same location as 8z Real Estate in Boulder.

However, the company doesn’t plan to just focus in Boulder, but rather expand across the Front Range, from Fort Collins to Colorado Springs.

Lindsey Wolters-Houtz, office manager at 8z Rentals, brings more than 10 years of experience managing hundreds of units in communities from Boulder to Arvada, Westminster and Broomfield.  8z Rentals will soon be adding a desk in 8z Platinum Partners’ office in Cherry Creek , which will allow them to better meet the needs of residents and owners in the Denver metro area.

For more information, please visit 8zRentals.

Have a story idea or news tip? Contact John Rebchook at JRCHOOK@gmail.com.  In addition to 8z Real Estate, InsideRealEstateNews.com is sponsored by Universal Lending and Land Title Guarantee Co. 

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Opposition to RedPeak has moved from the street to the courts.

Some opponents of the proposed RedPeak development in West Highland have filed a lawsuit to try to stop it.

Ten neighbors of the proposed trio of buildings in the heart of the trendy West Highland neighborhood have filed a lawsuit against the Denver City Council, the owners of the properties and RedPeak Properties. The $30 million to $35 million, energy-efficient development will have 147 units.

“The Highland group wants to prevent these high-rises – high-rises being five-story buildings –  from being built in West Highland,” one of the group’s lawyers, Curtis R. Henry, of Littleton, told InsideRealEstateNews late Friday.

“They believe it is contrary to the character of the neighborhood.”

Most industry standards do not consider five-story buildings high-rises.

The suit, filed in Denver District Court, also said that the U-MS-5 zoning approved by the council in June 2010 will reduce property values of nearby homes.

RedPeak is proposing five-story apartment buildings on Lowell Boulevard and Meade Street, just north of West 32nd Avenue and a four-story building on West Moncrieff Place.

The lawsuit does not ask for a specific reduction in the number of stories on the respective buildings.

“It would be difficult to say what would be acceptable,” Henry said. “It is a diverse group. It would be difficult for me to summarize the group’s feelings as a whole. There are a lot of different opinions. There are differences of opinions on what the parameters should be.”

Hard to fight City Hall

He did say it is an uphill battle fighting city hall, so to speak.

“If you are asking me the possibility of success, it is probably 49 percent or less,” Henry said. “It is less likely, rather than more likely that it will succeed. But who knows? I would call it a battle.”

Preliminary elevation of RedPeak's West Moncrieff Place apartment building.

Neither the Denver City Attorney’s office nor RedPeak officials immediately returned calls to InsideRealEstateNews. Other defendants in the lawsuit included the limited liability companies that own the properties and are headed by Thomas Wootten, as well as Robert E. Sechler, who owns a building along Lowell Boulevard, adjacent to the Moncrieff parcel that RedPeak plans to buy.

Michael Zoellner, president of RedPeak, has 20 days to respond to the summons, which was filed on April 27.

A hearing likely would be set about three months after the response, “and the court will decide who is right,” Henry said.

Asked what happens if RedPeak starts demolition and construction before a hearing is set, Henry said: “That is putting the cart before the horse. We would cross that bridge if it comes to that.”

Construction is slated to begin this summer. RedPeak plans to preserve the main part of the church on Lowell.

Lawsuit costly

The No High Rises in West Highland, a grassroots group that opposes the development said on its website that it was important to “keep a low profile,” on the suit that is “requesting judicial review of the flawed zoning near Highland Square. After months of preparation and consulting some of the biggest names in land use law, we are confident of the merits of our case. But fighting City Hall won’t be cheap,” and is asking opponents of the apartment development to donate money. On Thursday, it held a meeting to discuss the fund-raising campaign.

This marks the biggest development in its fight against RedPeak since neighbors held a protest march at West 32nd Avenue and Lowell Boulevard about three months ago.

Such a legal fight can “cost $100,000, easily” said Daniel Markofsky, a Denver attorney. Markofsky is not involved in the suit, and does not support the No High Rise group. Indeed, he was an opponent to an earlier City Council decision to down-zone much of the Sloan’s Lake area and explored the possibility of suing the city, but decided it was too expensive to pursue.

Lowell rendering

“Good for them,” Markofsky said about the neighbors who filed the suit. “Denver hasn’t had a big land-use lawsuit for a long time. I expect I will be following this one closely.”

The suit raises a lot of the arguments that opponents have been making for months.

It said the Main Street 5 zoning is defined as applying primarily to “collector or arterial street corridors, or may be embedded within a larger commercial shopping center or mixed-use area, where a building scale of 1 to 5 stories is desired.”

The suit goes on to say the U-MS-5 zoning does not conform with the Blueprint Denver plan adopted by the City Council in 2002. Blueprint Denver, it notes, designates the West Highland neighborhood as an “area of stability,” where limited change is expected during the next 20 years.

It said the parcels in question should provide a transition from the single-family residential homes to the north to the businesses along West 32nd Avenue to the south. The suit  notes that West 32nd Avenue that is near the proposed RedPeak parcels has been rezoned to U-MS-3, permitting three-story buildings.

”Therefore, properties which lie along 32nd Avenue a more heavily travelled business-oriented collector street – were zoned with a lower height limit and lower density than the Property, which is served primarily by local streets and is adjacent to a single family residential neighborhood,” according to the suit.

The suit said that the zoning to U-MS-5 was “intended to benefit, and does in fact benefit,” Wootten’s ownership groups and RedPeak.

Meade Street perspective

“City Council’s decision to rezone the Property to U-MS-5 was not made with the purpose of furthering a comprehensive zoning plan and was designed to relieve the Property from generally applicable, more restrictive zoning regulations,” the suit goes on to say. “The U-MS-5 zoning for the Property negatively impacts Plaintiffs’ properties and other properties in the area, by, among other matters, reducing property values.”

Spot zoning alleged

The suit contends the ordinance approved by the council to change the zoning was “arbitrary, erroneous and not a proper exercise of the police power as applied to the Property because it was not intended to further a comprehensive general zoning plan and as a result created an impermissible spot zoning.”

The suit said the ordinance should be reversed and “remand the matter to City Council for rezoning of the Property consistent with the provisions of Blueprint Denver and in conformity with surrounding properties.”

Earlier, Susan Shepherd, the city councilwoman who represents the district, decided not to seek a downzoning of the properties, saying she had no support from other council members and it would be a waste of scarce city dollars to pursue a cause that had no chance of succeeding. Also, seeking a downzoning would jeopardize concessions that RedPeak has voluntarily agreed to, such as lowering the number of floors on the Moncrieff property to four from the five floors allowed under the zoning,  she said.

Opponents, however, insist that RedPeak is not truly providing any concessions, but is acting in its own financial interest by reducing the size of the Moncrieff building. Some opponents have said that Zoellner has said RedPeak can get higher rents by having better views of downtown from the Lowell building. RedPeak officials, however, said they might be able to get $25 extra a month for a handful of units on Lowell, which pales compared to getting $1,000 to $2,000 a month on units on an additional floor on Moncrieff.

Many of the neighbors who filed the lawsuit have been active in the No High Rise group. Four of them live on Meade Street, three on West Moncrieff Place and one on Lowell Boulevard.

The plaintiffs who filed the lawsuit are Peter Brey, Don Fowler, Dennis and Lynn Keane, Todd Lilienthal, Bea Lopez, Christine Manesis, Gail and Richard Montoya, and Victoria Rozales.

Contact John Rebchook at JRCHOOK@gmail.com. If you would rather buy than rent in the area, please visit this COhomefinder.com link.

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Increases in demand for rentals were uneven across the state, however, with year-over-year increases in vacancies being reported in Colorado Springs, Grand Junction and Greeley. The rising vacancies likely reflected muted job growth in those markets in March with unemployment rates above 9 percent in all three areas.

The vacancy rate in the Fort Collins-Loveland area, on the other hand, fell to 3.0 percent, year over year, as employment remained strong in the Ft. Collins-Loveland area, dropping to 6.7 percent in March 2012.

The metro Denver vacancy rate during 2011’s first quarter, released last month in a separate survey, fell year over year from 5.5 percent to 4.9 percent.

“The statewide decline in vacancies is being driven by high demand for rental housing in the metro Denver area and in the Fort Collins-Loveland area,” said Ron Throupe, a professor of real estate at the University of Denver’s Burns School of Real Estate and Construction Management, and the report’s author. “Not surprisingly, we also see some of the most solid rent growth in those same areas.”

Vacancy rates in all metropolitan areas were:

• Colorado Springs, 6.4 percent.
•  Fort. Collins-Loveland, 3.0 percent.
•  Grand Junction, 10.4 percent;.
• Greeley, 5.8 percent;.
• Pueblo, 5.9 percent.

The statewide average rent in Colorado increased 4.6 percent from 2011’s first quarter to 2012’s first quarter, rising from $873 to $914. Across the state, however, growth in average rents varied considerably. The average rent in the Greeley area, for example, increased 4.3 percent, year over year, while the average rent in Pueblo was flat at -0.01 percent. During the same period, the average rent in Colorado Springs increased 2.4 percent, and it fell 4.8 percent in Grand Junction, year over year.

The largest increase in the average rent was found in the Fort Collins-Loveland area where it rose 11.1 percent from the first quarter of 2011 to 2012’s first quarter.

Rent growth

“The trend in rents in clearly toward growth and we’re seeing rent growth even in areas with rising vacancy rates right now,” said Ryan McMaken spokesman with the Colorado Division of Housing. “This suggests that owners are optimistic about future demand even in areas where declines in the vacancy rates have stalled during the past quarter.”

Average rents in all metropolitan areas measured were:

• Colorado Springs; $754.
• Fort Collins-Loveland, $1001.
• Grand Junction, $625.
• Greeley, $688.
• Pueblo, $570.

The metro Denver average rent, measured in a separate survey, was $952 during the first quarter.

Have a real estate story idea or a real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. InsideRealEstateNews is sponsored by Universal Lending,  Land Title Guarantee, and 8z Real Estate.

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The report by the Apartment Association of Metro Denver and the Colorado Division of Housing shows the first quarter’s year-over-year growth rate of 4.5 percent was the largest rate of growth reported during any quarter over the past 10 years. During the first quarter of this year, the average rent in metro Denver rose to $952 from last year’s first-quarter average rent of $911.

The average rent has not grown by more than 4.5 percent, year over year, since the third quarter of 2001 when it grew by 8.7 percent.

“Rents continue to increase as demand grows faster than the production of new units,” said Ron Throupe, professor of Real Estate at the Burns School of Real Estate and Construction Management at the University of Denver, and the report’s author. “Rents often tend to moderate a bit during the first quarter, but this year, the rent rose to an all-time high instead.”

The average rent rose in all counties measured, with the largest increases found in Denver County and in the Boulder/Broomfield area where the average rent grew year over year by 6.3 percent and 6.7 percent, respectively. The county areas with the highest average rents were Douglas County and the Boulder/Broomfield area where the average rents were $1,109 and $1,070, respectively. Jefferson County reported the lowest average rent at $897.

Rents rose as property owners responded to falling vacancy rates across the metro area.

The apartment vacancy rate in the Denver metro area fell to 4.9 percent in the first quarter of 2012, falling from 2011’s first quarter rate of 5.5 percent, and dropping to the second-lowest vacancy rate recorded in any quarter since 2001. The vacancy rate also fell from 2011’s fourth quarter rate of 5.4 percent. Since 2011, the vacancy rate in metro Denver was only lower during the second quarter of last year when it hit 4.8 percent.

For the past 10 quarters, the vacancy rate has fallen when compared to the same quarter one year earlier. The metro Denver vacancy rate has not risen year over year since the third quarter of 2009.

From the first quarter of 2011 to the same period this year, the vacancy rates dropped in all county areas surveyed including Adams, Arapahoe, Denver, Douglas, Jefferson and in the Boulder/Broomfield area.

“Vacancies are falling both metro-wide and in most neighborhoods we survey,” said Ryan McMaken, spokesman for the Colorado Division of Housing. “We still find some high vacancy rates out in eastern and southeastern parts of the metro area, but everywhere else we’re looking at rates in the three to four-percent range, which is low.”

Last year’s second-quarter vacancy rates by county were:

• Adams, 4.5 percent.
• Arapahoe, 6.3 percent.
• Boulder/Broomfield, 3.9 percent.
• Denver, 4.2 percent.
•  Douglas, 4.9 percent.
• Jefferson, 3.8 percent.

Average rents for all counties were:

• Adams, $934.
• Arapahoe, $909;.
• Boulder/Broomfield, $1070;.
• Denver, $973.
•  Douglas, $1109.
• Jefferson, $897.

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Preliminary elevation of RedPeak's West Moncrieff Place apartment building.

RedPeak Properties has released a rendering of the four-story, luxury apartment building it plans to build on West Moncrieff Place in West Highland.

Previously, RedPeak had released elevations of two five-story, nearby apartment buildings it plans to develop on Lowell Boulevard and Meade Street in Highland Square, just north of the popular and trendy West 32nd Avenue corridor.

RedPeak, after discussions with City Councilwoman Susan Shepherd and with constituents representing various neighborhood and retail interests, agreed to lower the height on the Moncrieff building by one floor.

Some members of a grassroots group called No High Rises in West Highland contend that was not a concession by RedPeak, but rather a calculated decision to increase its profit on the Lowell building, because the Denver developer could conceivably charge more rent on some units on Lowell that would have better views of downtown without an extra story on Moncrieff.

That is not the case, said Evan Lichtenfels of RedPeak.

“That is a misconception,”  said Lichtenfels, development director for RedPeak. “One of the concessions we agreed to was to lower the height of the building on Moncrieff from five stories to four stories.” He said RedPeak lowered the height because of the units proximity to single-family homes.

Modest rent increases possible in 4 units

“There was a discussion at one of the Design Advisory meetings where we talked about if that we lowered the height on Moncrieff that would improve the views on four units with views of downtown on the fifth floor of the Lowell Boulevard building ” he said. “The best we have ever been able to achieve in additional rent at other developments because of better views is about $25 per month. So if we were able to get another $25 per unit that is $100 per month. When you compare receiving an extra $100 per month to having another seven to nine units on a fifth floor on Moncrieff, where rents are averaging $1,000 to $2,000 per month, it does not make economic sense to say that we are removing the fifth floor as an economic benefit to us.”

Several people who work at competing construction and development firms said that financially, RedPeak would be better off to pay the incremental cost of adding a floor, rather than hope to achieve slightly higher rents in other units.

The buildings are being designed by Brad Buchanan of RNL

Moncrieff the most challenging site

Lowell rendering

The Moncrieff site was the most difficult to work with, Buchanan said. “It is the toughest in terms of its size,” Buchanan said. “It was the smallest of the three sites. There is an old adage in architecture – form follow function. If you try to fight it, you can run into problems. In this case, form clearly follows function. I think it is very successful and dramatic in how it steps down. I am very happy how it turned out. I think most of the people who sat around the table at the design committee also are happy with it.”

However, Buchanan said he doesn’t think it will please everyone.

“I don’t think it will make everyone happy because there are still some folks who will only focus on the height-dimension,” Buchanan said. “I do think there are some other people who have grown to appreciate that we have taken some architectural solutions to address and mitigate the height. I do think all of the scrutiny and concerns raised by members of the Design Advisory Committee really pushed the design team and we ended up with a better design because of the input.”

Buchanan also said that he is glad that the three buildings are not carbon copies of each other.

Meade Street perspective

“I am very happy that we are ending up with three distinctly different buildings,” he said. “When we first started we weren’t sure how that would play out. Were all three buildings sort of going to go in the same direction? If not identical to each other, were they going to look like they were in the same family, cousins,f not brothers and sisters? But because we responded to the constraints of the sites, which were different in each case, we ended up with different buildings. The physics of the sites introduced some challenges, but in this case, the challenges became opportunities.”

The Moncrieff Place building will have 29 units, the Lowell Boulevard building 70 units and the Meade Street  building will have 48 units, for a total of 147 units. The entire project is expected to cost in the neighborhood of $30 million to $35 million. It will create an estimated 200 to 250 construction jobs during the 18-month construction period, although not all of them will be on the site at the same time.

“We are very happy with the design,” Lichtenfels said. “The building on Moncrieff was very well received when we presented it at the most recent Design Advisory Committee meeting.”

Preliminary drawing

The image in the rendering is from the perspective of someone standing across the street and looking to the south, he said. The elevation shows balconies on some units. They may or may not stay. “This is a preliminary elevation,” he said. “This is the first iteration and it may change. We received some good feedback at the last design meeting and we will be taking their suggestions into account as we move forward.”

The committee has representatives from Shepherd’s office, the No High Rise group, the West Highland Neighborhood Association and retailers.

Lichtenfels said the next meeting will likely be in a month or two, but it may be with different people.

“Our next meeting might be with representatives with more of a background in construction-related activities,” he said. “The next discussion will likely be less design-focused and more focused on the actual construction. We will be looking at issues such as street closings and how to minimize the impact on the neighborhood during the construction.”

He said construction likely will begin in early August.

Nearby apartment community underway

Separately, Lauren Brockman of Allied Realty recently announced an $80 million, 332-unit luxury apartment development about a mile away near Interstate 25 and Speer Boulevard in Jefferson Park.

“I absolutely think there is enough demand for both projects,” Lichtenfels said. “I have an interesting statistic. From 1990 to 2011, zero new apartment units opened in West Highland. There is a lot of pent-up demand for market-rate units. Yes, we will feel some impact from Lauren’s project, as well as from some in the LoHi area. But West Highland and Highland Square are very desirable areas. I do think the demand will far out-strip the supply of new apartment communities coming online.”

Jeff Hawks, an apartment broker and principal of the Denver office of Apartment Realty Advisors said that if RedPeak had decided to pull out of the deal because of neighborhood opposition, other apartment developers would be standing in line to buy the land.

“I could sell that dirt all day long,” Hawks said last week and elaborated on his previous comment this morning. “If you look at all of Denver, the apartment land most in demand would be in the Highland/West Highland areas, with the possible exception of Cherry Creek, although most of the new product in Cherry Creek tends to be condos. But to have land in the heart of Highland Square could arguably be the single best site available anywhere in the Denver metro area.”

He said if the land were purchased by what is known in the industry as a “merchant builder”  - a group that builds apartments, leases them and quickly sells the completed project – it would want to construct the maximum number of units allowed under the zoning.

“Historically, most merchant builders do build to the maximum size and density allowed under the zoning, because that allows them to maximize their profits. If this land were available, I think it would be 50-50 whether it would be purchased by a merchant builder or another local company like RedPeak that planned to hold it for the long-term.”

Lichtenfels said that RedPeak already has received a number of unsolicited emails from people interested in renting units in Highland Square. “We haven’t started our pre-leasing or marketing programs yet, because the opening is just too far away. We don’t know if they will still be interested when it opens. But we are starting to keep a list.”

Contact John Rebchook at JRCHOOK@gmail.com

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East West Partners and Wood Brothers are going to develop the $62 million Alta House near Union Station.

East West Partners, developer of Riverfront Park and the Union Station neighborhoods, and Wood Partners, the nation’s most active  multifamily developer, will develop a $62 million, five-story apartment community in the heart of the Union Station/Riverfront Park redevelopment.

Atlanta-based Wood Partners and Denver-based East West Partners have arranged financing from USAA Real Estate Co. for the 280-unit community at 1801 Chestnut Place. It will include one-, two- and three-bedroom units, just west of Union Station. Construction will begin in August with the first move-ins scheduled in September 2013.

“We are excited about our second development within the Riverfront Park/Union Station area,” said Tim McEntee, Wood Partners director. “We purchased the land knowing that long-term it was a fabulous location. Today, this area and the whole urban lifestyle experience are exploding and we’re on the front end of it.”

Glass House team

Wood Partners and East West Partners previously collaborated on the highly successful Glass House high-rise condominium project in Riverfront Park in 2007. Ryan Dearborn, CEO of Wood Partners, was the executive in charge of Glass House, which was one of the most successful condo projects ever in Denver when it was initially launched. The company long envisioned the new Alta City House as a complementary development and purchased the land in 2006.

“We are excited about City House and working with Wood Partners again,” said Chris Frampton of East West Partners. “Wood Partners has developed some of the most compelling rental communities in the country.”

“We are very pleased to be part of such an exciting new apartment development in Union Station,” said Pat Duncan, Chairman and CEO of USAA Real Estate. “We also look forward to working again with Wood Partners, who are well-known for developing some of the most outstanding apartment developments in the country.  Alta City House also constitutes Wood Partners’ second joint venture increasing the total cost of projects for which USAA is the capital partner to over $200 million.”

Alta City House,  on a full block between 18^th and 19^th and Chestnut streets, will be at the base of the pedestrian bridge on 18^th Street and within 100 feet of the new light rail station just west of Union Station, and just blocks from the new train to DIA, projected for completion in 2016. The new community is just a few short blocks from the Platte River Greenway’s access to over 120 miles of bike trails.

Apartment specs

The five-story structure with garage will occupy slightly less than three acres and will offer one-bedroom units ranging from 645 to 825 square feet, two-bedroom units from 991 to 1,227 square feet and nine three-bedroom townhomes with 1,300 square feet.

“Alta City House will be the perfect destination for single young professionals and couples as well as empty nesters who are downsizing or seeking second homes in the core of urban life,”  McEntee said.

The community will feature a two-story fitness center, cyber café, two-story club room, game room, two large outdoor courtyards, one with a large pool area with outdoor fireplace, a plaza opening to the 18^th Street pedestrian bridge and 100 feet from the light rail podium, a large roof deck with a year-round outdoor kitchen facility and a striking view of Coors Field.

Alta City House is Wood Partners’ third development in the Denver area. The company’s most recent project, Alta Aspen Grove, is the first market rate apartment community of stick frame construction to be certified under LEED for Homes in Colorado

Wood Partners will lead the construction effort. Paul T. Bergner Associates is the architect, Harris Kocher Smith is the civil engineer and Norris Design is the landscape architect and land planner for Alta City House.

About the key players of Alta City House

Wood Partners is a national real estate company that acquires, develops, constructs and property manages high density and mixed-use communities. In 2011, it was ranked the nation’s No. 1 multifamily developer with 3,750 unit starts. It prides itself on quality construction, responsible land development and intelligent design. The company has been involved in the development of more than 40,000 homes with a combined value of more than $5.5 billion nationwide. Wood Partners has offices in 15 major markets nationwide including Atlanta, Baltimore, Boca Raton, Boston, Charlotte, Dallas, Denver, Houston, Newport Beach, Orlando, Phoenix, Raleigh-Durham, San Francisco, Seattle, Washington, D.C.

East West Partners is a family of related but independent companies devoted to building, selling, managing and supporting high-quality real estate in the communities in which they operate.  East West Partners was founded in 1986 with the purchase of a piece of land in Beaver Creek. Today, that development is the cornerstone of a portfolio of projects in resort & urban destinations across the United States. East West Partners’ development history includes hotels, condominiums, fractional ownership, spas, golf courses, restaurants, retail and clubs. In all, East West Partners has developed more than 60 projects comprising more than $3 billion of residential and commercial real estate. In 2011, one of its signature developments, Riverfront Park, won the ULI Award for Excellence: Americas.  To learn more about East West Partners, please visit  eastwestpartners.com

With more than $12 billion in assets under management, USAA Real Estate Company provides co-investment asset management services to U.S. pension funds, as well as to foreign and domestic institutional investors. USAA Real Estate Company also provides capital to partners for development. The portfolio consists of office, medical office, industrial, multi-family, retail and hotel properties as well as investments in real estate operating companies.  USAA Real Estate is a subsidiary of USAA, a leading financial services company, serving military families since 1922. For more information, visit www.usrealco.com.

Contact John Rebchook at JRCHOOK@gmail.com

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Allied Real Estate is about to start construction of this 332-unit, 2-building luxury apartment community near Speer and I-25.

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.”

Another view of the $80 million 2785 Speer apartment community

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.

Talk about rooms with views.

“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 5-story one one 4-story building 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.”

Contact John Rebchook at JRCHOOK@gmail.com

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Solar power at the Village at Legacy Ridge in Westminster.

Boulder-based Conscience Bay Co.  has flipped the switch on an powerful solar array at the Village at Legacy Ridge apartment community in Westminster.

Conscience Bay, a private equity firm investing in core office, multifamily and mixed-use properties,  acquired the 221-unit Class-A apartment complex in partnership with Denver-based Corum Real Estate Group last December and 86 kw of renewable energy is flowing only six months later. Corum, the original developer of the Village at Legacy, also manages the property and oversaw the installation of the solar project.

The $350,000 solar power system, designed and installed by Namaste Solar of Boulder, has 360 panels, spanning 15 buildings on the 12-acre site. The solar panels generate enough electricity to meet the majority of the property’s common electricity load.

“We are proud of our investment in renewable energy, which will allow residents the privilege of participating in sustainability,” said Eli Feldman, president of Conscience Bay. Jamie Fitzpatrick, principal of Corum Real Estate Group added: “We are delighted with our partnership with Conscience Bay, as we are both long-term holders of real estate, and controlling utility costs is a major component of our sustainable investment strategy.”

In addition to solar, Conscience Bay invested in a state-of-the-art irrigation controller that preserves water by measuring soil moisture and only activates when necessary. You won’t see the Village sprinklers running during a thunderstorm. The firm is implementing a holistic water efficiency plan for the complex, which includes an indoor water fixture analysis and aerator replacement program, plus the targeted replacement of excess turf grass with drought-tolerant native plants.

As part of their strategic investment plan, Conscience Bay and Corum participated in the Solar Rewards rebate program offered by Xcel Energy and the American Recovery and Reinvestment Act of 2009, which created a renewable energy grant program administered by the U.S. Department of Treasury. These rebates and grants are expected to defray almost 60 percent of the up-front cost of the system.

The remainder of the capital costs will be recovered in approximately six years, through a combination of REC payments guaranteed by Xcel for the first ten years of operation, and the actual value of the electricity generated on-site.

Contact John Rebchook at JRCHOOK@gmail.com

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Gordon Von Stroh, a beloved business professor at DU, has passed away.

To call Gordon Von Stroh a gentleman and a scholar is not a cliché.

Prof. Von Stroh joined the University of Denver as a professor of administration in 1967. DU, in announcing his passing earlier this week, described him as a “deeply respected and beloved” management professor.

“I think anyone who knew Gordon knew what a true gentleman he was,” said Ryan McMaken, spokesman for the Colorado Division of Housing, who had worked with Prof. Von Stroh on his acclaimed Apartment Vacancy & Rent Survey since 2006. “He was a throw-back to a bygone era.”

And there was no question of his scholarship when it came to the survey. “He was most famous for the survey,” McMaken said. “He certainly was one of the leading scholars in the multifamily industry. I don’t think any other city has a report as comprehensive as Gordon’s. Certainly no other city has the historical data and context of his report,” which he began in 1981.

Creating such a report – so accurate that it could spur lending activity when the numbers were bullish and help put the brakes on over-building when too much product was on its way – was no easy task.

“I don’t think a lot of people appreciate how much of the breadth and depth of that report came from Gordon’s cajoling,” McMaken said. “Your humdrum economist could not convince apartment owners to share the information that Gordon was able to obtain.”

Prof. Von Stroh, who had suffered from Lou Gehrig’s disease, was 69.

Prof. Von Stroh also was a longtime leader of DU’s Commencement committee, preparing each year to usher new graduates across the stage and into the DU alumni community. He was director of the MBA-customized program and the master’s of management program in the Daniels College.

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Peter Niederman and a partner purchased the remaining units in Penterra Plaza in the Denver Tech Center.

Penterra Plaza Partners LLC , a joint venture of the CEO of Kentwood Real Estate and an oil executive, has purchased the 32 remaining luxury residences at Penterra Plaza in the Denver Tech Center.

The seller was Simpson Housing LLLP . The acquisition, completed on Tuesday,  encompasses a total of 60,573 finished square feet, including nine penthouse units, 1,724 square feet of street-level retail space, and the www.PenterraPlaza.com domain name.

The exact purchase price of the multi-million-dollar deal of the remaining high-rise units at Penterra Plaza was not disclosed. The purchase was made by a joint venture formed by Peter Niederman, CEO of Kentwood Real Estate, and Frank Hutto, an oil industry executive and investor. The acquisition was brokered by Chuck Gargotto, a broker at Kentwood Real Estate’s DTC office,  on behalf of SHLP. Financing was arranged through Peter A. Smith, an assistant vice president of Steele Street Bank & Trust.

“This was a great opportunity to acquire truly remarkable residences in a building showcasing outstanding amenities in a Class A location,” said Niederman. “Our initial plan includes selling some of the units through Kentwood Real Estate and leasing some through DenverRental.com while the rental market remains strong. Penterra Plaza is among the most desirable luxury high rises in the region and offers a care-free lifestyle complimented by full concierge service, a business center with conference room, a state-of-the-art fitness facility, and extraordinary views.”

Stars align for buying opportunity

Given the shortage of “for-sale” units on the market and the strength of the rental market, Niederman believes the timing is perfect. “I couldn’t be more excited about this,” said Niederman. “These are never-lived in before  units. They have never been occupied. I would have been much more nervous if we were doing a deal like this two years ago. With an improving economy, the strength of the rental market, and the shortage of home supply, I truly think our timing could not be better.”

Units that are for sale are priced from $300,000 to $1 million. They range in size from 1,111 square feet to 2,826  square feet. Previously, the units had been listed from about $300,000 to about $1.55 million. Monthly rents range from $1,600 to $4,000. The exact mix between for-sale units and rentals is still being determined.

Penterra Plaza was built in 2003 and includes 266 residential units, a seven-story office building, a three-story underground parking garage, and 21,310 square feet of retail space. The residential tower includes a community sun terrace, a game/television room, and a guest suite for visitors. The high-profile venue features a  DTC location near light rail and the dining, as well as shopping and entertainment along the southeast corridor.

The luxury residences include gourmet kitchens appointed with slab granite countertops and stainless steel appliances, and sumptuous master suites and baths showcasing walk-in closets and jetted tubs. Each residence offers dramatic views, including the Rocky Mountains to the west, Cherry Creek State Park and Reservoir to the east, and Denver’s skyline to the north.

The retail space on the high-rise development’s first floor includes a McCormick & Schmick’s Seafood Restaurant. The retail space purchased in the acquisition will house DenverRental.com, a full-service leasing assistance and property management company.

SHLP, the developer of Penterra Plaza, is a fully integrated real estate firm that  primarily focuses on multi-family property management and development.

“We are excited to provide financing for this terrific opportunity and to be associated with Mr. Niederman, Mr. Hutto, and Penterra Plaza Partners, LLC,” said Brian Wilkinson, president of Steele Street Bank & Trust.

For more information on the rental units, contact Cindy Lopez of DenverRental.com at 303-682-3900 or email at info@DenverRental.com. Interested parties can view the rental units online in mid-March by visiting this link.

Sales are being handled by  Gargotto at 303-886-5303, email cgargotto@DenverRealEstate.com, and Larry Hotz at 303-877-9344, email lhotz@DenverRealEstate.com.

To see resale units available at Penterra Plaza, please visit this COhomefinder.com link.

Contact John Rebchook at JRCHOOK@gmail.com

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