Real Capital Solutions Acquires $188M Medtronic Lafayette Campus

Real Capital Solutions (RCS), a real estate investment company based in Louisville, has acquired the Medtronic Lafayette Campus from Ryan Companies for $188 million. The acquisition consists of two five-story life science office buildings located at 200 & 250 Medtronic Drive, at the intersection of HWY 287 and Northwest Parkway. The 42-acre, 404,159 square-foot property was completed earlier this year and is Medtronic’s second-largest U.S. campus, which will eventually house about 1,200 employees. As the sole tenant of the property, Medtronic, the number one medical device company in the world, has guaranteed a 20-year triple-net lease.

READ: How Life Sciences Are Fueling the Real Estate Demand in Colorado

“This was a rare opportunity to acquire one of the only purpose-built life science assets in Boulder County,” said Marcel Arsenault, Chairman, CEO and Founder of RCS. “We have a long history of investing in Colorado real estate, especially when it’s in our backyard. RCS is focused on high-credit, single-tenant net lease deals and Medtronic fits this profile perfectly. This deal is extremely safe and ensures our investors receive a stable, safe cash flow over the coming challenging years.”

The timing for the deal comes at a point when commercial real estate is seeing values erode in nearly every sector. RCS has been positioning for this downturn for some time, selling much of its at-risk portfolio, amassing cash and investing in similar high-credit, single-tenant net lease deals for itself and other ultra-high-net-worth families who are concerned about preservation of their capital.

“Not many companies are able to do a deal this size,” said Adam Abeln, Chief Acquisitions Officer for RCS. “We can because of our financial strength and sellers know we are capable buyers. Near-term, we believe commercial real estate values, especially in multifamily and office, will fall and defaults will rise. The next six to 18 months will be tough for many owners, particularly those who will need to refinance. We have strong relationships with lenders and plan to be major buyers, especially here in Colorado.”

 

Real Capital Solutions is a highly entrepreneurial real estate company that invests smart capital and provides practical solutions for real estate opportunities. The company has purchased and managed more than 370 real estate assets, totaling approximately $3.5 billion in acquisition value. RCS currently owns 70 properties with over $2.0 billion of assets under management.

How the Construction Industry is Building a Better Future for Colorado

Colorado’s construction industry is facing a daunting task. The General Assembly’s housing task force estimates that our state will need an additional 325,000 housing units to accommodate new and existing residents over the near term. Fulfilling this mission requires workforce development, technological innovation and smart public policy. 

READ: How Modular Construction Could Ease Colorado’s Housing Affordability Crisis in 2023

Colorado’s shortage of affordable housing has been front and center for years, but the problem has become more acute since the COVID-19 pandemic. Earlier this year, Zillow released a report on housing needs in the 100 largest cities in the U.S. Denver’s housing shortage of 70,000 units ranked 13th in the country. Lawmakers at the state and federal level have responded with millions in public investment and high-profile legislation to address the housing supply deficit.

The mechanical, plumbing and HVAC/R contractors that make up the backbone of Colorado’s construction industry have heard the message loud and clear. 

To ensure that the industry is prepared to meet our state’s housing needs, we are working with our academic partners, including the Western States College of Construction (WSCC), to cultivate the next generation of skilled workers. All WSCC graduates can embark on journeyman education courses, which tee up alumni for a fulfilling — and increasingly lucrative — career in the construction trades. The construction industry is also hard at work to expand the benefits of these institutions to include associate degrees.

READ: The Economics of Housing Inflation in Colorado — Exploring the Supply and Demand Imbalance

Another key priority of Colorado’s construction industry is the development of new technologies to prepare member companies for the challenges that lay ahead. Construction firms across the state are already taking advantage of 3D modeling, virtual and augmented reality, and other tech platforms to improve efficiency and safety in their operations. Improvements in air condition and refrigeration systems, piping systems, drinking water and wastewater systems are becoming more critical as homebuyers and policymakers place more of an emphasis on energy efficiency and water conservation.

Advancements in technology will be happening faster over the next five years than they did in the last century, and we should be doing all that we can to embrace those advancements to support and build our workforce. In the skilled trades industry in Colorado alone, we are projecting a need for over 50,000 new employees by 2030. This comes at a time when the State Demographer is projecting a reduction in the available workforce more generally. Our ability to compete for this workforce will be largely dependent on technological advances and the benefits they provide to broaden our recruitment methodologies. We should be very wary of any legislation and litigation that would impair this industry as this could have a direct effect on our ability to build our next generation of tradespeople.

Colorado’s construction industry is investing heavily in the workforce and technological resources our state needs to tackle our housing supply shortage. Coupled with the support of our academic partners and elected officials, we can help build a future where all Coloradans have access to affordable housing.

 

Dave Davia serves as the Executive Vice President and CEO of the Rocky Mountain Mechanical Contractors Association.

8 Strategies for Weathering Real Estate Market Volatility for Investors

If there is anything certain in real estate investing, it’s this: nothing is guaranteed. One quarter, business is booming and properties are full. The next, the economy is slumping, tenants are fleeing and the bottom line is getting thinner and thinner.

Smart investors understand the sometimes-precarious nature of investing in real estate and plan accordingly. Here are eight strategies for weathering real estate market volatility.

READ: How to Reduce Real Estate Investment Risks — 12 Expert Tips

Why markets are volatile

Contrary to what some inexperienced investors might believe, real estate market volatility is not directly tied to renter demand. In fact, it begins well before a potential tenant comes to view a property.

Economic factors that can swing the market one way or the other include:

In short, anything that worries consumers about their paycheck’s future or savings account can affect the real estate market. 

READ: Surviving Food Inflation — How Colorado Restaurants Adapt to Rising Costs and Labor Challenges

9 strategies for weathering real estate market volatility

Fortunately, there are ways to protect your investments.

1. Don’t put all of your eggs in one basket 

Maybe you got into real estate investment thinking of creating an empire of multifamily units for rent. But what happens when new properties are built, the renter pool gets shallow, and rent is no longer paying the bills?

It’s okay to start with one type of property in the beginning, but smart investors whether real estate market volatility by investing in different properties that include:

Additionally, spreading your investments out across a wider geographic area can help mitigate unpredictability. When one area takes a hit, the other might be spared.

2. Kick the can down the road

No, this does not mean putting off dealing with current volatility. It does mean thinking of real estate as a long-term investment, not a short-term windfall. Even properties that are not lucrative in the beginning can have a big payoff as they appreciate over time.

Keeping this frame of mind means you won’t make any drastic moves when hard times hit.

3. Invest with other people

There are two basic ways to invest with other people.

  1. Real estate investment trusts (REITs): REITs allow you to invest in someone else’s property. This takes the burden of investment, property maintenance, and management off of you and enables you to diversify your portfolio with a variety of properties. Investment in a REIT can also be liquidated much faster than physical property.
  2. Get a partner: When you partner with another investor, you share that investment’s profit and burden. It’s essential that you make this a legal business partnership, not an informal contract between friends. 

READ: 8 Questions to Ask a Potential Real Estate Investing Partner

4. Protect your cash

Cash reserves are critical for unexpected expenses, including major unscheduled maintenance or a jump in vacancy rate. Another bonus of a stockpile of cash is that it’s possible to grab other investments at low prices when the real estate market takes a downturn. Cash deals are often favored during these times as other (unprepared) investors liquidate their portfolios.

5. Pay attention

When the economy slows or world events loom, don’t stick your head in the sand, hoping it will pass. Pay attention to market trends and changes in regulations that can eat into (or bolster) your portfolio. This helps keep you agile and ready to change course if needed.

6. Don’t ignore the flipper

Some real estate investors focus primarily on ready-to-rent properties. Don’t let this be you. Value-add properties such as total rehabs or properties that could be repositioned often generate a better return on investment (ROI) than those shiny new buildings.

7. Invest in technology

Old-school investors may prefer phone calls and paper deals, but digital technology can help anticipate and cope with real estate market volatility. Data analysis tools are critical in understanding:

  • Changes in property values
  • Market trends
  • Potential investments 

8. Make friends

Many people think real estate is about numbers, but it’s really about relationships. When times get tough, real estate investors who cultivate relationships with other investors, brokers, lending institutions, and contractors are better able to weather the storm. These relationships can offer a wealth of information, insights, and advice — as well as potential investment opportunities.

READ: Maximize Your Impact — The Power of Intentional Network Building

9. Think quality, not quantity

Remember Monopoly? There are two types of people who play Monopoly:

  1. Those who buy up every property they can, regardless of board position, cash flow, or how many other properties they have.
  2. Those who are strategic, waiting to buy blocks of property on the second half of the board (or all of the railroads and utilities).

To better withstand market volatility in real estate investing, be like the second Monopoly player. Think of purchasing quality properties that add to your portfolio, not just every cheap building that comes across your desk. This helps you build a small but stable portfolio that grows over time, right along with your bank account.

 

Screen Shot 2021 12 28 At 113128 AmLuke Babich is the Co-Founder of Clever Real Estate, a real estate education platform committed to helping home buyers, sellers and investors make smarter financial decisions. Luke is a licensed real estate agent in the State of Missouri and his research and insights have been featured on BiggerPockets, Inman, the LA Times and more.

AI-Enabled Real Estate: How Automation is Impacting the Housing Market

Many of us don’t readily recognize the role that AI is playing in real estate. Surprisingly, AI is already shaping nearly every aspect of the real estate market, from the way houses are being designed and constructed, to the real estate investment market. Believe it or not, in some ways it is even being utilized to customize and guide the home-buying experience.  

READ: AI Revolution — Unveiling the Transformative Power and Unforeseen Consequences

Home construction AI

Artificial intelligence design in home construction seems pretty futuristic but it may well become more mainstream in the coming years. One of the reasons is because of the sheer number of homes that will need to be built in the coming years to meet the demand. Think about the way that Colorado alone has grown over the past couple of decades. The world’s population is growing at an astounding rate — if all of those people are to be housed, literally hundreds of thousands of homes will need to be constructed. 

Already, AI-based tools are being utilized for things like the production of materials used in home construction. Other tools are already being incorporated into home surveys and inspections. Drones are commonly incorporated to evaluate the health of existing roofs or plumbing. Hundreds of companies are working to develop tools that may well completely change the home construction industry, making it both safer and more efficient. 

READ: The Economics of Housing Inflation in Colorado — Exploring the Supply and Demand Imbalance

AI-assisted home searches

All of this can ultimately add up to changes in how people look for homes in the first place. The incorporation of AI tech may drive down costs or make it easier to ascertain how much damage there is in an existing home. Some companies and real estate agencies are even launching products that help filter home characteristics and better drive customized home searches. 

Imagine looking for your dream home in Aspen or Boulder and being able to customize the search toward exactly the characteristics you’re looking for. Or perhaps being in Denver and being able to narrow your search to apartments that fit your specific needs in certain neighborhoods. Colorado’s real estate market has pushed up over the half-million dollar mark for the average home during the COVID-19 pandemic but is, fortunately, starting to come down a bit. AI-assisted home searches can help buyers find a wide selection of homes they’re able to afford. 

AI in home financial decisions

At a much higher level, home investment financial decisions are also being made with the help of AI technology. For example, AI can be utilized to help identify emerging markets that investors can make a killing in. A lot can go into these analyses such as where population growth is happening, home availability, how rental rates are doing, job growth and certain government policies that could promote growth. On the flip side, it can also be a help in determining when markets are becoming less lucrative. 

READ: Identifying Emerging Real Estate Markets — Key Indicators for Lucrative Investments

The tech can also do a number of other things that impact real estate investment decisions. Artificial intelligence can be used to value property, assess damages and review risk assessments. For instance, are increasing droughts in the West likely to cause risk with home investments? How are wildfires and other extreme climatic events playing into risk factors in the Colorado home insurance market? All of this information can be incorporated into a larger company investment strategy very quickly using AI-driven tools to help make better, more informed decisions. 

Of course, there are still a lot of risks with real estate investment in general. Markets are constantly changing and buying homes can be a bit too easy when you have the funding for it. The real work comes with managing the homes over the long term or putting in the money to complete the renovations that were planned. Artificial intelligence is a tool that can help inform decision-making — perhaps even a really great tool — but ultimately, the risk is on the person who makes the decision to invest. 

Artificial intelligence is making its way into every aspect of our lives, including the real estate market. The tech has the power to change real estate in nearly every way from home construction processes to how people search for their dream homes to how real estate investment decisions are made. It is a powerful tool, one that will forever change the housing market.  

 

Indiana Lee Bio PictureIndiana Lee is a writer, reader, and jigsaw puzzle enthusiast from the Pacific Northwest. An expert on business operations, leadership, marketing, and lifestyle, you can connect with her on LinkedIn.

How to Reduce Real Estate Investment Risks: 12 Expert Tips

Risk is part of any investment. Nowhere is that more apparent than in real estate. When you purchase a property, there’s no guarantee you’ll see a profit. Renters may stop paying rent, the economy might suddenly crash or the real estate market may shift. Here are 12 tips to reduce real estate investment risks.

READ: 4 Biggest Risks of Real Estate Investing in 2023 and How to Minimize Them

1. Diversify your portfolio

The golden rule of real estate investing is to diversify your portfolio. This means purchasing different types of properties so you won’t suffer too much financially if one investment collapses. 

For example, central retail locations, such as malls, have suffered a severe downturn as commerce moves online. Real estate investors who own other types of real estate, such as rehabbed houses or vacation rentals, will likely see better returns than those whose portfolios are stacked with brick-and-mortar shops.

2. Expand to other locations

Diversifying your portfolio is about more than just what you buy. It’s also about where you buy. This means owning property in urban, suburban, and rural areas and expanding property ownership to other states. Consider working with long-term tenants who are looking to move to another location. It’s a win-win if a landlord and a tenant can find a great new location together.

READ: Identifying Emerging Real Estate Markets: Key Indicators for Lucrative Investments

3. Monitor industry trends

Paying attention to industry trends can help you make better choices regarding new investments. Heed important industry data, such as:

  • Where people are moving and where they are leaving
  • Micro-markets, such as areas close to schools, transportation, amenities, and greenspaces
  • Cultural trends

Trends can be tracked through investing apps or by subscribing to major industry publications.

4. Make sure you’re insured

You’ll need comprehensive insurance for any properties you own. This is an industry standard and protects against vandalism, fire and other natural disasters.

If you are concerned about tenants defaulting or not paying rent, rent guarantee insurance is also an option.

5. Take care of your investment

It can be tempting to neglect maintenance and upkeep when money is tight, but resist this urge. Not only does proper care and maintenance protect the value of your property, but it also makes it more attractive to prospective tenants. Additionally, regular maintenance means you’ll catch small problems before they become big ones.

6. Rent carefully

Background checks that screen for criminal history and financial problems are important. These help you find the most reliable tenants for your property.

READ: Tenant Scams — How Landlords Can Spot and Avoid Them

7. Manage costs

Hidden costs can potentially increase real estate investment risks. On top of your mortgage payment, you should also expect to pay real estate agent commission, closing costs, taxes, insurance and maintenance expenses. 

If money is tight and the economy is uncertain, keeping track of every penny is important. Check regular bills — such as insurance, utilities and taxes — to ensure rates are competitive and you get whatever discounts you qualify for.

8. Find unique opportunities

Experienced and novice investors alike tend to stick with what they know: commercial, residential, medical and retail spaces. But they should also consider unique real estate investments, such as parking spaces and garages. Consider the number of times you’ve driven around a building looking for a parking spot, and you’ll immediately understand the value of these unusual investments.

READ: The Ultimate Guide to Commercial Real Estate Investing for Business Owners

9. Maintain a financial cushion

No matter how carefully you plan, predicting every twist and turn you might experience is impossible. For this reason, it’s important to maintain a financial cushion that you can spend in emergencies, which may include: 

  • Unexpected vacancies
  • Market downturns that lower demand
  • Unforeseen repairs

Every situation is unique, and there’s no specific rule dictating how much of a financial buffer you’ll need. Some investors might be comfortable with a few thousand dollars in the bank. Others advise against keeping too much cash on hand and recommend reinvesting every penny into a new property instead. If you’d feel more comfortable with an emergency stash, set up a high-interest savings account so your money is making money while it’s in reserve.

10. Follow the rules

Nothing torpedoes your profits faster than fines and legal fees accrued when you don’t follow the rules. Before purchasing or selling a property, make sure you have legal counsel specializing in real estate to review all contracts. You’ll also need to ensure the zoning is correct for your intended purposes. Changes in zoning can be time consuming and expensive if modifications are needed.

11. Make sure your timeline matches your goals

Some real estate investment risks are a long game. Do you have time for that, or are you interested in more immediate results? Few investments will be profitable overnight, but some will be more productive sooner. Commercial real estate has had historically high returns, while residential properties have had lower returns. However, a well-placed rental can produce consistent income. The property that’s right for you will depend upon your objectives.

12. Assemble a solid team

Teamwork makes the dream work. From your real estate agent to your property manager, assemble a solid team committed to you and your portfolio. Your team can help protect your investments, even in a challenging market.

 

Screen Shot 2021 12 28 At 113128 AmLuke Babich is the Co-Founder of Clever Real Estate, a real estate education platform committed to helping home buyers, sellers and investors make smarter financial decisions. Luke is a licensed real estate agent in the State of Missouri and his research and insights have been featured on BiggerPockets, Inman, the LA Times and more.

Inside Denver’s Emerging West Side Story — Billions in Development Bring a ‘New City’ to Life in District 3

Early 265 acres of prime real estate in a once-marginalized neighborhood is slated for billions of dollars in development that will result in virtually a new city on the southwest side of downtown Denver. 

A handful of planned developments will bring tens of thousands of new residences, office space and shopping and entertainment to the Denver District 3, which includes the Auraria, Sun Valley, and West Colfax neighborhoods. 

“This was where nobody wanted to live,” said District 3 City Councilwoman Jamie Torres, a Denver native who grew up in the neighborhood. “It was built out later than the rest of the city because we were redlined for a long time. There was disinvestment in this part of town.” 

With so many developments teed up, it’s crucial that the city take a holistic approach to developing infrastructure including roads, bridges, utilities, water, pedestrian and bike paths and public transportation as well as services such as fire, police and paramedics. 

READ: How Life Sciences Are Fueling the Real Estate Demand in Colorado

The developments along the Platte River will be connected by light rail, pedestrian walkways and bike paths. They’ll also be stitched into Denver’s central business district to make walking from the 16th Street Mall to Sun Valley a pleasant experience. 

“Attention to connectivity needs to be a prime component,” said Kourtny Garrett, president and CEO of the Downtown Denver Partnership. “16th and Market to Sun Valley may be a 30-minute walk, but when you have a contiguous experience block by block, it’s the journey, not the destination. There’s an entire new quadrant of our city that’s about to pop, and that’s really exciting.” 

Urban Ventures President Susan Powers, a pioneer in the neighborhood who developed Steam on the Platte, said Meow Wolf was a catalyst for the planning activity that’s now happening in the area. 

“What needs to happen is that somebody needs to look at all of this together,” Powers said. “There’s so much development potential here, but somebody needs to be connecting the dots. The magnitude of all those projects being developed is like another downtown.” 

Projects in the works include the parking lots surrounding Ball Arena and Empower Field at Mile High Stadium; The River Mile, a mile-long stretch along the South Platte River that includes Elitch Gardens; Burnham Yard, which is owned by the Colorado Department of Transportation; and Sun Valley. 

The Auraria Campus is in the early stages of creating a new master plan; and ideas for reconfiguring Speer Boulevard and developing housing, a hotel and education and retail space are being floated. 

“The west side is the future of Denver for the next 50 years,” said Rhys Duggan, president and CEO of Revesco Properties, which is developing the River Mile project in the area. 

READ: Identifying Emerging Real Estate Markets — Key Indicators for Lucrative Investments

The River Mile 

A public planning process for The River Mile, a 62-acre development planned along the Platte River, was completed in 2018. The planning process resulted in a high-level vision for the mile-long stretch along the Platte River from Speer Boulevard to West Colfax Avenue. Developer Revesco Properties completed an Infrastructure Master Plan and entered a development agreement with the city. 

The plan requires reengineering the South Platte River, which will be partially funded with $350 million in federal money. 

As part of the plans and agreements set for The River Mile so far, at least 15% of future residential units will be affordable — some at the 0% to 30% area median income (AMI) level and some at the 30% to 60% AMI. The affordable units will include a range of home types, including larger three-bedroom units for families. 

The development will have a community recreation center. Because of open space requirements, everyone at The River Mile will be within a five-minute walk to a park and a three-minute walk to a public open space like a plaza. 

The area will also have new pedestrian and cyclist connections across the river and two light-rail stops to improve mobility throughout the area. 

Development planned for The River Mile includes 4.7 million square feet of commercial space, 520,000 square feet of retail space, 7,600 residences, including 934 affordable units, and 137,000 square feet of education and recreation centers. 

Revesco, the developer behind the art experience Meow Wolf, recently bought an additional 2.5 acres upstream from The River Mile. It will seek rezoning to allow more height on the property. 

READ: Grand Junction’s Opportunity Zones — A Prime Pick for Real Estate Development

Ball Arena 

Kroenke Sports & Entertainment (KSE) will connect Denver’s urban core with the River Mile and create a new “Sports Mile” on Wynkoop Street between Coors Field, Empower Field and Ball Arena. 

Last July, KSE submitted an Infrastructure Master Plan to the city to redevelop the 55 acres of mostly parking lots surrounding Ball Arena into about 12 million square feet of residential, retail, office, hotel and education uses. 

More than 20% of the land area, bordered by Speer Boulevard, the RTD light-rail line and Auraria Parkway, will be dedicated to parks and open spaces, and the redevelopment will make bicycle and pedestrian connections cross and over physical barriers that have stranded the site. 

KSE’s proposal calls for 6,763 residential units totaling 5.38 million square feet; 582,763 square feet of retail space; and five office buildings encompassing 2.9 million square feet. A 309-room hotel at the south corner of Wewatta Street and Speer Boulevard also is proposed. 

KSE is planning an ambitious sustainability program for the project, which prioritizes mixed mobility infrastructure and water management. A central utility plant on the city could form an energy loop that shares thermal energy within the district. 

Stadium District Master Plan 

Denver City Council approved the Stadium District Master Plan in June 2019. The plan provides guidance for a future mixed-use neighborhood hub on Empower Field at Mile High’s southern parking lots. 

The plan area is bounded by the South Platte River and Interstate 25 on the east, Federal Boulevard on the west and Lakewood Gulch on the south. The plan covers the southern portion of the stadium as well as adjacent properties, including the cloverleaf where Federal Boulevard and Colfax Avenue meet southwest of the stadium. 

The plan recommends that the northern part of Metropolitan Football Stadium District property remains flexible for game-day uses. 

The property is owned by the Stadium Investment Corp., a nonprofit venture between the Metropolitan Football Stadium District, the Stadium Management Co. and an affiliate of the Denver Broncos Football Club, which paused their redevelopment work in 2020. 

“Since this is privately owned land, redevelopment of these parking lots hinges on the property owner’s appetite to move forward,” said Laura Swartz, communications director for Denver’s Community Planning and Development department. “If the Stadium District wanted to resume a development proposal in the future, it would need to align with the community’s vision and recommendations in the adopted Stadium District Master Plan.” 

That vision is for a neighborhood destination that supports local arts and culture, provides a mix of uses in an environment that prioritizes pedestrians and bicyclists and activated and enhanced access to a variety of high-quality public spaces. The community also wants to see a variety of housing, including additional affordable housing, and jobs within the plan area for people of all incomes, ages and abilities. 

The plan is designed to encourage development that supports the Sun Valley community and surrounding neighborhoods by providing opportunities for small businesses and local employment. 

Burnham Yard 

The Colorado Department of Transportation (CDOT) acquired the 58-acre Burnham Yard property in 2021. The property is east of Interstate 25 between West Sixth and West Eighth avenues and extends a little more than a mile from 13th Avenue to Fourth Avenue. 

The site, which is zoned for industrial use, includes about two dozen buildings. 

At the time the deal was announced, the agency said it anticipated using about 17 acres of the rail yard to relocate train tracks, allowing for improvements to I-25 through central Denver while reserving right of way for Front Range Passenger Rail and an expansion of congested RTD light-rail lines. 

CDOT is studying all rail alignments to determine which would position the property for optimal development as well as provide the most efficient operations of freight and passenger rail through the site. 

The Colorado Transportation Investment Office, a CDOT enterprise, owns the property and is working with the city and other stakeholders to figure out which portions of the land must remain free of development so they can be used for surface transportation. The land that is not used for transportation will be sold to private developers. 

Sun Valley 

Over the past decade, the Denver Housing Authority (DHA) has been planning the redevelopment of Sun Valley, one of the city’s poorest neighborhoods. In 2016, the U.S. Department of Housing and Urban Development awarded DHA a $30 million Choice Neighborhood Initiative Implementation to implement the Sun Valley Neighborhood Transformation Plan. 

The redevelopment plan includes replacing 333 obsolete public housing units with new energy-efficient developments, including more than 950 mixed-income housing units. 

DHA completed the first phase — Gateway North and Gateway South at West 10th Avenue and Decatur Street — in 2021, and the buildings’ 187 units were fully leased by the first quarter of 2022. 

In February, it opened two buildings in the second phase of the redevelopment — GreenHaus and Thrive, which have both income-restricted and market-rate units that are now available to lease. 

“We’re doing one-for-one replacements for all original housing units — where we had five bedrooms before, we also have five bedrooms in the new structures,” said Erin Clark, DHA’s chief real estate investment officer. “We’re building everything to market-rate standards.” 

Buildings in the third phase — Sole, Joli and Flow — will open by early 2025. The third phase also includes a restaurant incubator space that will be managed by the Youth Employment Academy, which has a mission to serve young adults in breaking the cycle of generational poverty. 

DHA also is working with market rate developers who will buy parcels from the agency. 

In addition to housing, DHA is working with the city to build a 10-acre park that includes a civic plaza. It’s also opened Decatur Fresh Market, a grocery with an international flair, in the ground floor of the Gateway South building and is working with the Denver Botanic Gardens, which will help residents grow their own produce. 

“It’s so exciting that we’re finally embracing the South Platte River as an amenity after we’ve turned our back on it for so long,” Clark said. “All of these developments and redevelopments are us opening our eyes.” 

 

Margaret JacksonMargaret Jackson is an award-winning journalist who spent nearly 25 years in the newspaper industry, including seven years as a business reporter for The Denver Post covering residential and commercial real estate. She can be reached at [email protected].

Unlocking Buying Potential: The Ultimate Guide to Commercial Real Estate Investing for Business Owners

Are you a business owner looking to invest in commercial real estate? If the answer is yes, then you’ve come to the right place. Commercial real estate can be a great investment opportunity for business owners, but it comes with unique challenges and considerations. That’s why we’ve created the ultimate guide to commercial real estate investing for business owners. In this guide, we’ll cover everything you need to know to get started with commercial real estate investing, including the benefits of investing in commercial real estate, the types of commercial real estate properties and the steps involved in the investing process.

READ: The Pros and Cons of Investing in Real Estate During a Recession

Benefits of investing in commercial real estate

There are several benefits to investing in commercial real estate as a business owner. Firstly, it can provide a steady source of rental income, which can help to offset any costs associated with your business operations. Secondly, commercial properties can appreciate in value over time, providing you with a valuable asset that can be sold for a profit in the future. Commercial real estate can also provide tax benefits, such as depreciation deductions, which can help reduce your tax liability.

Types of commercial real estate properties

Commercial real estate encompasses a wide range of property types, including retail, office, industrial and multi-family properties. Each property type has its own unique advantages and considerations. For example, retail spaces are typically located in high-traffic areas and can generate significant rental income, but they can also require more maintenance and repairs than other property types. On the other hand, multi-family properties can provide a stable source of rental income, but they may be subject to higher vacancy rates and turnover.

The investing process

The investing process for commercial real estate is different from that of residential real estate and requires different skills and knowledge. Some of the steps involved in the investing process include finding the right property, conducting due diligence, securing financing and negotiating the terms of the deal. It’s important to work with a team of professionals, including a real estate broker, attorney and accountant, who can help guide you through the process and ensure that you are making informed decisions.

READ: LLCs and Real Estate Investing: Pros and Cons You Should Know in 2023

Managing your investment

Once you’ve invested in a commercial property, it’s important to manage it effectively in order to maximize your returns. This may involve hiring a property manager to handle day-to-day operations, such as tenant communications and maintenance requests. It’s also important to stay up-to-date on market trends and conditions in order to make informed decisions about when to buy, sell, or make improvements to your property.

Investing in commercial real estate can be a great way for business owners to diversify their portfolios and generate passive income. However, it’s important to approach the investment process with a thorough understanding of the risks and rewards involved. By following the steps outlined in this guide and working with a team of professionals, you can make informed decisions about your commercial real estate investments and maximize your returns over time. Good luck!

 

Brooke Chaplan headshot.Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most of her time hiking, biking, and gardening. For more information contact Brooke via Twitter @BrookeChaplan.

Identifying Emerging Real Estate Markets: Key Indicators for Lucrative Investments

As a real estate investor, it’s important to learn how to identify emerging real estate markets. There are several key indicators that show when an area might be a lucrative investment opportunity. While some cities will always be desirable to live in, a great investor can learn how to spot locations that others miss. Here are some examples of what to look for when considering your next real estate investment.

READ: The Pros and Cons of Investing in Real Estate During a Recession

Rising rental prices

Rental prices are a solid indicator of whether an emerging real estate market is growing. If an area consistently has rising rent prices, it means there is demand for housing in the area. It’s also good to monitor how long rentals stay available. If rentals have multiple applications and fill quickly, it’s likely a good indicator that the area is an up-and-coming market worthy of consideration.

Population growth

Keep an eye out for areas in the country with increasing population sizes. In particular, look for areas with growing numbers of young professionals and young families. This segment of the population will be looking for homes and rentals, which you can capitalize on as an investor. Cities that are listed as the best places to live, especially those that don’t typically appear on “best of” lists, are also great to consider.

READ: A Guide for First-Time Colorado Homeowners Moving to Our Rocky Mountain State

Company announcements

Another economic indicator to follow is company announcements. For example, if a tech company or a car company announces they’ll be opening a new office or factory in a particular location, take notice. Typically, these announcements create excitement and help grow the local economy in whichever city will be home to new businesses. They’ll likely draw in workers looking for places to live, and that demand brings enticing options for investing in single-family homes and rental units.

Infrastructure development

If an area implements new infrastructure improvements, like new highways, public transportation systems and airport hubs, it could be an indicator of a good investment opportunity. People want to live in cities with shopping, ample housing, new roads and proximity to airports. If a city’s infrastructure starts rapidly improving, it could attract more people to live there.

Government incentives and policies

Changes in zoning laws, tax incentives and other policies can spark economic growth in an area. Locally, you can attend community meetings to learn about upcoming votes and potential new laws that might positively impact real estate investors. It’s also important to follow these developments on the state and federal level as well by keeping abreast of emerging real estate markets.

Urban revitalization

Pay attention to areas that are undergoing major redevelopments. These might be historic areas where a city offers incentives to save specific buildings. Or, it could be a neighborhood making efforts to revitalize and improve. Sometimes local governments offer incentives, like grants, to businesses willing to open shops in areas they want to revitalize. By following the news and tracking these types of developments, you could identify areas that are up and coming to invest in.

READ: What Is the Difference Between Class A, B, C and D Properties?

School district accolades

Stay on top of education news, as public school systems are a big part of why people live in specific areas. If a particular school has won a grant, improved its technology, raised test scores or received a particular award, it could be an indicator that people will be interested in moving to that area in the future.

Foreclosure rates

Low levels of foreclosures in a particular area indicate a healthy market. Typically, you can access foreclosure data online. If you notice an area with low foreclosure rates, it could indicate a stable economy and solid job market that supports the local community. Conversely, high foreclosure rates would be a red flag for investors.

Insights from industry leaders

Lastly, it’s also a good idea to meet and develop relationships with changemakers, industry leaders and experienced realtors in various areas. Realtors who work full-time selling homes and managing rentals can give you an on-the-ground perspective on the state of the market. 

These professions can identify neighborhoods that are beginning to see an influx of residents and tourists. Speaking to them regularly can help you stay in the loop about flourishing communities in your area.

READ: The Economics of Housing Inflation in Colorado — Exploring the Supply and Demand Imbalance

Turning tips into action

By being aware of the emerging real estate markets indicators above, you can spot areas that might be profitable investment opportunities, even after accounting for commissions and other buying costs. Furthermore, being aware of these signals can help you to avoid investing in areas that are either stagnant or in decline.

 

Screen Shot 2021 12 28 At 113128 AmLuke Babich is the Co-Founder of Clever Real Estate, a real estate education platform committed to helping home buyers, sellers and investors make smarter financial decisions. Luke is a licensed real estate agent in the State of Missouri and his research and insights have been featured on BiggerPockets, Inman, the LA Times and more. 

Banyan Residential Secures $73M Loan for First Multifamily Development in Colorado

Banyan Residential, an LA-based real estate investment firm, has closed a $73M loan to finance the construction of Banyan High Point, a 399-unit multifamily development in Aurora, Colorado. The project is being developed in collaboration with Bridge Investment Group. Construction is expected to begin in early June with estimated completion slated for Q1 2025. The loan was provided by UMB Bank.

Located at Picadilly Road and East 65th Avenue, Banyan High Point will be comprised of one-, two- and three-bedrooms ranging from 568 to 1,450 square feet. Designed by W Partnership, the project is thoughtfully designed for contemporary living, boasting sleek and sophisticated interiors with high-end finishes. Residents will have access to first-class amenities including a resort-style pool and pool deck, clubroom, cutting-edge multi-level fitness center, meeting spaces, parking garages, a dog park and access to a five-acre park adjacent to the development.

“It’s very exciting to begin construction on our newest development in Aurora, which also marks our foray into the Colorado market,” said Ryan Seeley, Vice President at Banyan Residential. “With the Denver metro area demonstrating sustained growth and increasing demand, it’s an excellent market in which to grow our business and execute our strategy of providing high-quality multifamily communities. We look forward to soon delivering new residences to this vibrant area.”

Nestled in Aurora, Colorado, Banyan High Point offers the ideal mix of city and suburban living with its thriving community, strong job market and rich history. Its prime location near Denver International Airport, exciting local attractions and top employment centers make it an ideal choice for those seeking convenience and comfort.

“We are pleased to support another opportunity zone development in the Aurora High Point neighborhood with a great partner like Banyan Residential,” said David Coelho, Chief Investment Officer of Bridge Investment Group’s Opportunity Zone Funds. “This market has seen tremendous development in recent years and we are thrilled to contribute to the growth in this vital community.”

For more information, please visit banyanresidential.com.

About Banyan Residential

Established in 2019 and headquartered in Los Angeles, Banyan Residential specializes in multifamily, office, and retail development in gateway markets across the United States. The firm currently manages a development pipeline exceeding $1.6 billion in value, comprising more than 4,500 residential units and 260,000 rentable square feet of office and retail space in select Arizona, Texas, Colorado, Nevada, and North Carolina markets.

Buying a Home in 2023 — High Mortgage Rates, Low Inventory and Tougher Approval Process

Have you tried buying a home lately? The pandemic days of 20 offers, waiving inspections and closing prices 15% above asking prices may be gone, but major issues remain. I am married to a realtor, so I can assure you I hear about it all the time; it still isn’t easy to buy a home. The new issues are high mortgage rates, low inventory and a tougher approval process. However, if you can navigate all the headwinds, owning a home can still be a terrific long-term investment.

READ: The Pros and Cons of Investing in Real Estate During a Recession

High mortgage rates

During the pandemic, mortgage rates on 30-year mortgages were below 3%. Today, they are around 6%. Variable rates were even lower. That is a significant difference for a first-time homebuyer. In fact, many younger people may not qualify because home prices haven’t come down commensurate with the rise in mortgage rates. This difference in mortgage rates could mean hundreds of dollars more on a monthly basis. As of March 31, nearly two-thirds of primary mortgages had an interest rate below 4%, and about 73% of primary mortgages had fixed rates for 30 years, according to Black Knight data.

No inventory

If homeowners don’t sell, “the movement up the ladder is sort of grinding to a halt,” said Sam Khator, Chief Economist of Freddie Mac. “It is getting much harder for first-time home buyers to jump into the market because of the lack of supply.” According to the National Association of Realtors (NAR), a healthy housing market has between four and six months of supply at current sales rates. The existing home market, which makes up most of the housing market, hit a record low of 1.6 months’ supply in January of 2022 and stood at only 2.6 months’ supply in March of 2023. 

Can’t move

People that were lucky enough to lock in a low mortgage rate of under 3% now don’t want to move because they can’t afford to pay double the interest payment. It doesn’t matter if their house is too small, in a bad location, or if aging baby boomers want to downsize. They are stuck in a home that may no longer work or be appropriate for their needs. They may have considered selling last year, but now it doesn’t make any financial sense to do so. Until interest rates drop, they have no choice but to stay where they are.

READ: LLCs and Real Estate Investing: Pros and Cons You Should Know in 2023

Tougher approval process

One nasty side effect of the recent regional banking crisis is that local banks and mortgage companies are under great scrutiny in terms of loans on their books. Buying a home requires more money down, higher credit scores and a longer job history to qualify today. The number of lenders that even want your business may have shrunk, too. Be prepared for approvals to take longer with even more paperwork than before.

Good investment

Is buying a home even a good investment? Odds are if you can stay in your home for more than five years, buy in a good location and don’t overpay, homes can potentially be one of the best investments you can make. Homes have acted as a great inflation hedge as well. If prices for goods and services keep going up, the price of your home should, too.

Baby Boomers who are selling their homes now after living in them for 20-30 years are making a small fortune. Typically, 70% of Americans’ net worth is tied up in their homes and because they are paying down the principal every month, they are building up equity in their homes over time. However, the cost of selling your home can be as high as 6% if you use a realtor, so you want to make sure you really need to move.

The good news is that your mortgage should be tax deductible. If you move but keep your home, you might be able to create a source of rental income and increase your cash flow. You would also be able to offset this rental income with depreciation and other expenses, so you shouldn’t have to pay taxes on the rental income.

READ: Purchasing a “Second Home” as Your First Property

The solution

Hire the best realtor you can find in your local market who might have pocket listings (they know about homes not currently listed but sellers would sell at the right price), have a mortgage lender letter ready showing you are a qualified buyer and finally take advantage of the 2-1 buydown concession. This buydown is a new financing tool because of higher mortgage rates.

Sellers are now subsidizing, in escrow, at the time of closing the first two years of the buyer’s mortgage at a much lower interest rate, 4% instead of 6%. After the two years are up, the mortgage goes back to the original rate. However, if mortgage rates are lower at that time, the buyer can refinance at a more favorable rate. Buyers must make sure they can afford the higher rate in case interest rates don’t come down.

Although buying a home has been difficult historically, artificially low-interest rates in 2020 and 2021 made it an incredibly attractive time to lock in a long-term mortgage. Today that isn’t the case. Higher rates are probably here to stay for the foreseeable future. My first mortgage in 1985 was at 13%, and when I refinanced at 10%, I thought it was as good as it would ever get. From that perspective, a 6% mortgage still looks like a great rate; we were just really spoiled for those two pandemic years.

The American Dream is still buying a home, and over the long term, has been a great creator of wealth in this country. I don’t see why this time in history is any different just because of higher interest rates. It could be much worse, like 1985.

 

Thumbnail Fred Taylor HeadshotImportant Disclosure:

Fred Taylor is a Partner, Managing Director at Beacon Pointe Advisors, LLC. The information contained in this article is for general informational purposes only. Opinions referenced are as of the publication date and may be modified due to changes in the market or economic conditions and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. Past performance is not a guarantee of future results. Beacon Pointe has exercised all reasonable professional care in preparing this information.