‘Game-changing’ development planned in RiNo after $86M land sale

Fresh off its partnership to co-develop the new World Trade Center Denver, a Chicago-based real estate investment and development firm, along with its Denver-based counterpart, purchased 13 acres of prime real estate in the River North Art District with plans to create a mixed-use development that celebrates the site’s history.

Golub & Co. and Denver-based Formativ, along with an unnamed institutional investor, purchased 13 acres of land at the 32-acre Denargo Market development for $86 million, according to public records.

The sale, which closed Thursday afternoon, comes more than three years after Denver-based Brue Capital Partners and KAGE Partners, along with Tice Capital, purchased the three separate parcels for $32 million. The $86 million deal netted the seller a 168% premium.

“This acquisition in one of Denver’s most sought-after submarkets will be the centerpiece of our portfolio in the Western U.S. and reinforces the long-term commitment we made when we established our Denver office in 2018,” Michael Newman, president and chief executive officer of Golub, said in a statement.

Officials with the partnership said Thursday that the development of the land will be a “community-focused, mixed-use development project that will celebrate Denargo Market’s storied role as the center of commerce in Denver,” while activating use of the South Platte River.

Denargo Market was originally constructed in 1939 as a collection of industrial warehouses leased to area produce growers, who sold their products to grocers and wholesalers. The site has undergone phases of redevelopment over the past several years.

Sean Campbell, CEO of Formativ, said the site is “poised to be one of the most dynamic, young professional districts within the larger RiNo neighborhood.”

“Together, Formativ and Golub will deliver a game-changing and one-of-a-kind development that establishes Denargo, and RiNo, as the place to do business in Denver and to take advantage of all the region has to offer from dining and entertainment, to outdoor recreation,” Campbell said in a statement.

The deal comes the same week that Golub and Formativ signed an agreement and closed on the final parcels of land to co-develop the 350,000-square-foot office building for World Trade Center Denver, also being built in RiNo. Formativ also inked a deal with Tennessee-based Kemmons Wilson Companies to co-develop the World Trade Center’s 240,000-square-foot, 240-plus-room hotel and conference center.

CBRE’s Eric RothMartin Roth and Chris Phenicie represented the seller in Thursday’s Denargo Market deal.

“The transaction illustrates the continuing demand from high-quality developers and institutional capital willing to acquire well-located urban sites,” Eric Roth told Denver Business Journal.

The deal is made up of multiple parcels in the neighborhood: 11.2 acres at 2809 Delgany, 0.7 acres at 3280 Denargo St., and 0.5 acres at 2700 Wewatta Way and half an acre at 3205 Denargo St. The sale works out to about $151 per square foot.

PepsiCo sold two parking lots in RiNo last week for $36.2 million, a deal that works out to $220 per square foot. Price per square foot typically decreases as the size of the land increases.

Link: ‘Game-changing’ development planned in RiNo after $86M land sale

World Trade Center Denver project brings on new partners, poised to break ground this year in RiNo

Project first announced in 2016 now located in tax-break producing opportunity zone

In stasis for much of the last two years, the World Trade Center Denver project in the city’s RiNo district took a big leap forward this week when new partners signed on to co-develop its office and hotel towers.

Groundbreaking on the 2.1-acre site at the northwest corner of 38th and Walnut streets is now expected to happen before the end of the year.

Formativ, the Denver-based mixed-use developer leading the project, announced Wednesday it signed up Chicago-based Golub & Co. to co-develop the 14-story, 350,000-square-foot office tower there. A division of investment banking giant Goldman Sachs will be the lead equity investor in the $180-million project that will include an above ground parking garage with more than 600 spaces, according to Formativ.

“We’re incredibly excited about having Golub & Co. as our partner,” Formativ CEO Sean Campbell said. “They opened an office here in Denver last year and we’re really excited to be working on these projects with them.”

Golub’s portfolio includes the Tribune Tower in Chicago and Park Tower in San Francisco where Facebook leased 750,000 square feet last year, according to a news release.

Kemmons Wilson Cos. from Memphis, Tenn., meanwhile has signed on to co-own and develop the project’s “hospitality tower,” a nine-story, 240,000-square-foot project that will include a conference center and hotel of at least 240 rooms. Company namesake Kemmons Wilson launched the Holiday Inn hotel chain, but no brand has been attached to the forthcoming accommodations in RiNo yet. That tower is expected to cost north of $114 million, Campbell said.

“It’s an exciting time to be entering the hotel market in Denver,” McLean Wilson, principal of Kemmons Wilson Cos., said in a news release.

The RiNo district added its first two hotels — the Ramble and the Source Hotel — last year.

Karen Gerwitz, president of WTC Denver, the Mile High wing of the nonprofit trade organization, first announced plans to move her headquarters to the River North Art District in early 2016, in part because of a lack of event space in the old digs downtown.

Dirt was expected to move on the project site — adjacent to the development-driving 38th and Blake Station rail stop — as early as the winter of 2017. Part of the delay was due to a beneficial change in the regulatory weather: The land the project sits on is in an opportunity zone. The opportunity zone system, created by the 2017 Tax Cut and Jobs Act, allows investors to put built-up capital gains into funds that are invested in state-designated zones that cover economically floundering areas. Any investments in those zones held for 10 years will see all capital gains taxes on them waived. After waiting for the IRS to iron out rules around the zones, Campbell expects his project to attract more investors and ambitious office tenants.

“I think it will be a draw for a company looking to have an HQ or be born in an opportunity zone and take advantage of that,” he said.

Launched as a mechanism to market and support artists living in the formerly neglected industrial area, the River North Art District has exploded over the last few years. It is now home to a multitude of bars, restaurants, apartments and high-profile commercial projects such as the Hub building at 3601 Walnut St., headquarters of HomeAdvisor. Golub vice president Josh Patinkin referred to it as “one of the fastest growing office sub-markets in the country,” in a news release Wednesday.

Formativ has been there since the boom began, co-developing the Industry Denver shared working space that opened on Brighton Boulevard in 2014. Now, Industry has a second location across the street from where the WTC Denver project will rise.

Formativ isn’t discussing tenants in the project at this time, but Campbell made it clear the WTC Denver will be center stage. The campus is expected to open in 2021.

“They’ll be one of the namesake tenants with their office there and run their larger vision of making Denver and the metro area a global presence, promoting international trade and business throughout the state and the larger Rocky Mountain region,” he said. “We’re excited to help them create a global city.”

Link: World Trade Center Denver project brings on new partners, poised to break ground this year in RiNo