Commercial properties become residential

DENVER (KDVR) – Former Colorado Art Institute at 12e Lincoln Streets is being redeveloped into a 10-story building that will house 194 studios.

This is a recent example of the conversion of a downtown commercial space into a dwelling. The units are tiny – 300 square feet on average – and will rent between $ 1,200 and $ 1,500 per month, depending on the rental market, once the project is completed by the end of 2022.

“They’re small, but wait and see how smart we do this layout,” said Melissa Rummel, director of development at Nichols Partnership.

This is the same company that turned an old Holiday Inn hotel next to Mile High Stadium into Turntable Studios apartments.

Rummel said the Turntable project confirmed to him that it’s not just students who want to live downtown.

“This will satisfy a wide range of housing demands,” she said. “I can say this from experience.”

The demand for more housing comes as the demand for office space declines.

The Denver Downtown Partnership told Problem Solvers that only 15 to 25 percent of office workers have returned to downtown office buildings since the start of the COVID pandemic.

“We were forced to conduct a lot of work from home experience, and we found we were pretty good at it,” said Jeff Engelstad, professor of commerce at the University of Denver.

Occupancy rates in the city center have increased since the start of the pandemic.

According to CoStar, which tracks commercial real estate news around the world, the downtown Denver office vacancy rate was 12% in the first quarter of 2020. In the second quarter of 2020, it was 13.4%. , then it jumped to 14.4% in Q3, followed by 15.1% in Q4. In the first quarter of 2021, the vacancy rate had risen to 16.9%.

“The market always finds a way. Now we have a problem with office space, ”said Engelstad, who believes there will be more downtown conversions from commercial space to residential housing.

The Denver Metro Association of Realtors told Problem Solvers that Denver has attracted the most workers over the past 12 months from New York, Chicago and San Francisco, places where people are likely familiar with downtown life.

Local developers are noticing this, as evidenced by the change in plans submitted to the town hall. What was to be offices at 955 Bannock Street will now be a 12-story apartment building.

It’s not just a downtown trend either. In Cherry Creek North, a site at 3250 E. Second Ave. was to be a five-story office project. In April, developers submitted new plans to make it a five-story tower filled with 22 housing units.

Could Converting Office Buildings to Residential Spaces Help Alleviate Denver’s Housing Crisis?

“Absolutely,” said Rummel, the developer. “It doesn’t necessarily reduce the need for single-family homes. This market still exists and this demand still exists. It gives people the opportunity to live downtown at an affordable price. “

About Gloria Turner

Check Also

Could TestFit Become a Dallas ‘Unicorn’? Investors are betting on it

Creating real estate development plans typically takes weeks of iterations and back and forth between …