Getting your player ready...
Denver is getting huge attention for its favorable outlook at a time when the national economic forecast is cloudy – including for its continued apartment absorption – hitting records, a sign of likely opportunities for investors. Last month the New York Times featured the Mile High as a city on the ‘Sunny Side of the American Economy’ – highlighting startups like Ibotta and Gnip – while Zillow ran a ‘Trends’ piece on Denver’s ‘migration, millennials and renters.’
“Denver is an exception in the national scene,” says Apartment Developer Darell Schmidt, launching a new rental project in Denver’s Uptown neighborhood oriented around millennial demographics. “There are opportunities here for small investors to invest in apartments.” Schmidt’s company, Greenwood Village-based Allante Properties, is now finishing the design work for Emerson Place — Allante’s third urban development in three years designed around a younger renter profile, one seeking attractive yet affordable housing in popular downtown neighborhoods. As with the two previous projects, Allante is assembling a group of smaller investors to couple with local bank financing to start construction, in the fourth quarter of this year. “Part of our business plan is to group small like-minded investors together to invest in large apartment developments in urban locations,” says Schmidt. “It gives smaller, accredited investors who want to diversify their investments a chance to move some of their positions out of stocks, bonds or IRAs, or to use current cash that’s sitting in a bank account earning next to nothing.” Some 80 investors, says Schmidt, are already pleased with Allante’s two past projects — one in Highlands, built and producing income, and one in Berkeley, under construction. “The data all point to a continuation of trends that underscore the strategy,” he adds. “Growth in the city in recent years is disproportionately millennials,” says Schmidt, adding that first-quarter apartment absorption was a record. “They’re drawn by the low employment, the trendy urban scene and the recreation. The cost of renting has gone up, but the alternative cost of purchase housing in Denver has risen even faster, making renting a solid option, if not the only option.” As with the previous projects, Allante’s site for Emerson Place is oriented for walkability – right across the street from Presbyterian St. Luke’s Medical Center and just blocks from one of the downtown area’s most popular restaurant rows, where Steuben’s, Ace, Avenue Grille and other dining venues anchor dozens of surrounding taverns and coffee bars. Emerson Place’s 85 apartment units are being disproportionately arrayed in favor of smaller units that will keep rents attractive to that millennial profile – including units of what Schmidt is calling ‘micro units,’ some as small as 400 square feet. Along with the walkable attractions and easy access to downtown employers, Emerson Place will provide millennial-oriented amenities: private underground parking, a club room with fitness center, a Sky Deck with views of downtown’s skyline and the mountains, and an outdoor kitchen and fire pits. That formula created a remarkably fast lease-up at Allante’s Highland Place community near Highland Square: apartments leased within weeks and commercial/retail space absorption followed rapidly. Now Allante is building Tennyson Place, 39th and Tennyson in Denver’s Berkeley neighborhood, with a similar lineup of walkable attractions (the financing group for that has already been assembled).Follow Mark Samuelson on Twitter:
@marksamuelson