Getting your player ready...
Denver rents are going up – yet there’s little sign that the Mile-High City has near as many apartments coming on line as the market will absorb. Developer Darell Schmidt of Allanté Properties is looking at the numbers and betting that those new units should be smaller ones -more attainably priced for younger renters, while giving the best return to investors. And he has a new project to show you in Denver’s hot Berkeley neighborhood designed around those parameters.
“The rental rate has risen so much that it’s pricing kids out of the market,” says Schmidt, who’s now in the second-design phase with Oz Architects for Tennyson Place, 82 class-A apartments for a site at W. 39th and Tennyson Street in Denver’s Berkeley neighborhood, near the old Elitch Gardens. In Schmidt’s newest revision, the building will render 80 percent of its units either as studio apartments or what he’s calling ‘micro units’ — as small as 400 square feet. “Those smaller units are really going to rent in this market,” he adds. Meanwhile, a newly released study by two professors from Florida universities questions whether it even makes sense now for buyers to buy rather than rent, considering the rapid run-up of home prices since the end of the recession. Denver is one of three markets named (along with Dallas and Houston) where the authors say that line has already been crossed; where buyers should hold back and rent instead. Tennyson Place’s smaller units are a win for cost-conscious renters; but also for Allanté’s potential investors, who take positions from $100,000 to $500,000 for a project like this. “The smaller unit sizing allows us to charge less per month, which is what tenants look at; but more per-square-foot, which is what drives solid return for investors,” he says. Over the past three years Allanté has already taken 63 investor positions on previous projects, including on one just wrapped up a mile east of here in central Highlands, where Schmidt proved out the ‘micro unit’ concept (the building is now complete and already 81 percent leased, along with 76 percent of its ground-floor retail space). “When a potential investor calls, I ask them to check me out on the web, and then look at my resumé,” Schmidt says. “This is all about trust, in wanting a decent return and a safe return.” Number-one objective, he adds, is to protect capital; and number two is to generate a high return. Moving into this new Tennyson Street project, Schmidt says he’s already seeing faster-paced interest among investors, and doubts that positions will be available for long. Part of that optimism is based on the site in Berkeley, where blocks of Tennyson Street adjoining Allanté’s site are becoming a new ‘restaurant row’ with brew pubs and chef-inspired dining such as Axios Estiatorio, Block & Larder, The Royal, sushi places, and numbers of established Berkeley haunts like Café Parisi, DJ’s Berkeley Café and Kyle’s Kitchen. There are coffee bars and grocery stores, including Sprouts, Kings and Safeway, much closer than from Highlands. Tennyson Place will feature private underground tenant parking, an attractive exterior with a first floor club room with fitness center, a front porch deck on Tennyson Street, private terraces on floors 2, 3, and 5, and a Sky Deck with two fire pits, barbecue bar and outdoor Lawn Theater. You can talk with Darell Schmidt about investor positions in Tennyson Place, 303-359-1210, or visit GoInvestDenver.com. WHERE: Tennyson Place, 82 Class-A apartments by Allanté Properties, small to large studios & 1-bedrooms, underground parking next to prime dining & shopping block on Tennyson Street, north of W. 38th Ave; investor positions available. Construction site W. 39th Ave at Tennyson in Berkeley. Newly opened Highlands Square project 3372 W. 38th Ave at Julian St
