Getting your player ready...
Time is running out for smaller investors to take part in developer Darell Schmidt’s latest new-urban residential project: 81 class-A apartments designed around millennial generation tastes, for a site along Tennyson Street’s ‘Restaurant Row’ in Denver’s Berkeley neighborhood. A flurry of smaller investments joined the project over the past two weeks – leaving limited opportunities before construction starts.
“This is an opportunity that won’t last through the end of August,” Schmidt says.
The new project is latest in a series by Schmidt’s Allanté Properties, each venture designed around Denver’s burgeoning market for rental housing – particularly among millennial renters. Allanté’s construction funding always combines a component from smaller investors, many of them looking to diversify from the stock market – in addition to major lender funding.
“In Denver’s market, we’re building something that’ll potentially be worth significantly more the day we get it leased than what it costs us to build,” Schmidt says. “You can look at this as being able to buy a class-A asset at a discounted price prior to construction, and getting the equity once it’s built and leased up.
“Where else can you get a discounted price on commercial real estate?” Schmidt adds. “And I manage the project and do all the work.”
Schmidt, with 32 years and $770 million in previous development experience, began including small investors in 2011. His last two projects, eight blocks east in Highlands, another on the Fitzsimons medical campus, attracted 63 investors — many re-upping to be part of the Tennyson development. “They experience this ‘ah-ha moment’,” he says. “You’re buying 18 months ahead of when it will be completed, betting that I can create the value, while knowing that I’ve done that in our last two projects. It’s tantamount to buying a car from the manufacturer rather than from the dealer.”
Meanwhile, a new study released by the National Association of Realtors shows that Millennial generation buyers prefer walking as a mode of transportation over driving; prefer attached housing, and want to be close to shops and dining – just the latest in a fast accumulating body of research about the demographic now flocking to Denver. Tennyson Place, in final design by Oz Architects, allocates 80 percent of its rental offerings to smaller, more affordable apartments: either studios, or what Schmidt calls ‘micro units’ – some as small as 356 square feet.
“Those smaller units are really going to rent fast,” Schmidt adds, noting that small units keep rents lower, a win for younger renters – while allowing a higher return per-square-foot, a win for investors. Schmidt provides a comprehensive portfolio to prospects, some of whom will end up investing as little as $100,000 in Tennyson Place. You can already see the site at W. 39th and Tennyson Street, just north of the old Elitch Gardens, where venerable dining like Café Parisi, DJ’s Berkeley Café and Kyle’s Kitchen are now matched to newly arrived brew pubs and chef-inspired dining like Axios Estiatorio, Block & Larder, The Royal, and sushi places. Coffee bars two ‘natural foods’ grocers, are very close. Residents at Tennyson Place will get underground parking, a club room with fitness center, private terraces, and a Sky Deck with fire pits and barbecue bar.
For demographics and the investor specifics – including a new animated tour through Tennyson Place – arrange to meet Darell Schmidt at 303-359-1210, or visit GoInvestDenver.com.
– Mark Samuelson writes on real estate and business; you can email him at mark@samuelsonassoc.com. You can see all of Mark Samuelson’s columns online at DenverPostHomes.com
