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Tag: businessden

  • DTC landlord defaults on loan amid ‘beyond bad’ local office market

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    A small office complex in the Denver Tech Center has been placed into receivership following a loan default, and its owner expects the lender to take the building.

    “The Colorado office market is a joke. It is beyond bad,” said Pat Melton, director of leasing for the Canadian firm Melcor.

    In 2016, Melcor paid $16.85 million for The Offices at the Promenade, a 132,000-square-foot complex at 7935 and 7995 E. Prentice Ave. in Greenwood Village.

    Two years later, records show, the company took out a $10.6 million loan on the property from Genworth Life Insurance Co. that it needed to pay off by the end of June 2025. But the company did not do that and still couldn’t pay when Genworth gave it three extra months.

    That’s according to GLIC Real Estate Holding, a subsidiary of Genworth that was assigned the loan last month.

    GLIC says Melcor owed $9 million on the loan as of Jan. 28, with interest continuing to accrue at the default rate of 9.9% annually.

    In a Feb. 5 lawsuit, GLIC asked the court to appoint Trigild IVL LLC as receiver to oversee the property. Arapahoe County District Judge Joseph Riley Whitfield signed off on the request Feb. 9.

    Melton, the Melcor executive, said the Denver-area office market is way worse than in Phoenix, Arizona, the other U.S. market where Melcor owns office space.

    “Things are healthy in Phoenix,” he said.

    In Colorado, leasing demand has “gone way down,” Melton said.

    “So much vacancy, and costs are so high,” Melton said of the market. “And so many brokers with their hands out for money.”

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    Thomas Gounley

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  • 10 weeks free and an Ikon Pass: Denver landlords ramp up concessions

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    The easiest way to get free stuff in Denver right now is to lease a new apartment.

    “In the Denver market, we are certainly offering concessions, and I would expect most landlords are,” said Frank Campise, a Chicago developer who owns about 15 apartment buildings throughout the metro area.

    Apartment landlords facing the financial fallout from too much supply

    The region’s multifamily market has softened amid a historic increase in supply at the same time that demand has softened because of declining job growth. According to the Apartment Association of Metro Denver, the vacancy rate for Denver itself is 7%, with an average rent of $1,849 a month. That’s the lowest rent since the start of 2022.

    The picture is slightly rosier for the broader seven-county metro area, where the vacancy rate is 6.4%, according to the association.

    A certain period of free rent is the most common concession. Campise said that, to keep buildings full, lots of landlords are offering one to two months free.

    “In 2023, I think that’s when the market started to implode,” he said. “We would have not had any concessions in ’23. Not only would we have not had any concessions, but the top-line rent would have been 15% higher.”

    And two months isn’t the ceiling. Both The Alder, a new building in Parker, and The Russell, in Olde Town Arvada, are offering up to 10 weeks free on leases with 12-month terms or longer, according to their websites.

    Bill James and Eric Karnes, meanwhile, track Denver’s apartment pipeline for local research firm JRES Intelica CRE. Their data shows about 17,000 new units completed in the third quarter across the entire metro area. In comparison, only 5,000 units have started construction through the first three quarters of the year.

    “We get into a recession, and all these new projects keep coming. … Boy, that vacancy rate could shoot up over 10%,” Karnes said.

    The pair noted that landlords are also tacking on extra goodies. The Adler offers a $750 gift card if a tenant leases within 48 hours of touring the apartment. And at The Russell, move in by the end of November and you get a free Epic or Ikon ski pass.

    “And you can tell the lender – ‘It’s marketing!’” Karnes said.

    Sky-high concessions are most commonly found in new buildings still in lease-up. The owners often have a construction loan with a deadline and are in a race to get units filled before refinancing. They claim concession losses as a marketing expense, which allows their books to show they are paid full-price rent, even if the effective rent that a tenant is paying is less.

    Managers of older apartments can take a different approach to stay competitive.

    Denver-based Cornerstone Apartments manages 7,500 units, most in older buildings in central Denver, for a host of smaller landlords.

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    Matthew Geiger

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  • Retired slugger Charlie Blackmon lists Belcaro house for $4.3M

    Retired slugger Charlie Blackmon lists Belcaro house for $4.3M

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    Charlie Blackmon, who retired last month after a 14-year career with the Colorado Rockies, has moved back to Georgia and listed his home in Denver’s Belcaro neighborhood.

    Blackmon lives full time in Atlanta with his wife, Ashley, and their two young children, so he’s selling his home in a gated community near Cherry Creek.

    He listed the 5,500-square-foot, four-bedroom, five-bath home with a three-car tandem garage on Sept. 11 for $4.3 million. Justin Joseph and Deviree Vallejo with LIV Sotheby’s International Realty have the listing.

    Blackmon purchased the home, constructed in 2014, for $2.8 million in June 2018.

    “We’ve loved the outdoor living space and think it’s among the best features of our home. The home gets great sunlight which lends itself to a dip in the pool or just enjoying the patio,” said Blackmon, who answered questions about the home in writing.

    “We’ve also enjoyed many cool Denver evenings hanging around the custom gas firepit with friends. When the weather is great, we also open the sliding doors that merge the outdoor TV area with the living room,” he said. “We’ve loved it all.”

    The home features a chef’s kitchen with Wolf and Sub-Zero appliances, a built-in Miele coffee maker, and a large marble island and ample storage. The second floor includes three large bedrooms, each with an ensuite bathroom.

    Joseph called the home a peaceful enclave in the city’s heart and an entertainer’s paradise.

    After Blackmon purchased the home, he improved the outdoor space by adding performance tile and inlaid turf that extends around the home’s side for a dog run, Joseph said.

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    Sara B. Hansen

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  • Empower accuses rival of spying and poaching its financial advisors

    Empower accuses rival of spying and poaching its financial advisors

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    On the last day of January, an all-hands meeting was called at Empower Advisory Group, the financial planning division of the massive Greenwood Village-based company.

    Nine financial advisors for Empower’s wealthy clients had unexpectedly resigned en masse five days before and the company was scrambling to understand what it all meant.

    What it didn’t know then but believes now is that there were corporate spies at the meeting.

    On March 1, four more financial advisors resigned abruptly — what Empower called “a second wave” of resignations carefully designed by a competitor to cause it “maximum harm.”

    These allegations of corporate espionage and client poaching are spelled out in a lengthy lawsuit that Empower filed in Denver federal court March 13 against a baker’s dozen of former advisors and the New York company they left Empower for: Compound Planning.

    “Instead of competing for clients fairly and honestly in the marketplace, Compound chooses to poach employees and clients from its competitors, like Empower,” it alleged.

    Compound CEO Christian Haigh declined to comment on those allegations Friday.

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    Justin Wingerter

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