Denver—CBRE has announced that it has brokered a loan of $92 million for the construction of a 218-unit, mixed-use, luxury high-rise rental community on the north side of Denver’s high-end Cherry Creek neighborhood that will likely set a new price-per-unit record in the market. The community, Steele Creek, is being developed by Denver-based multifamily real estate developer BMC Investments, with financing coming from publicly-traded REIT, UDR Inc.
“Nothing like this exists in Denver,” Curtis Palmer, CBRE executive vice president tells MHN. “It’s basically the gateway to Cherry Creek, which is the preeminent market in the Denver MSA and we believe it’s going to be the nicest project there.”
The $92 million non-recourse participating loan will represent 85 percent of the development’s total costs. Palmer, along with senior vice president Ted Fentin and first vice president Peter Sherman, completed the financing.
“It’s unusual,” Palmer says of a non-recourse participating loan. “Typically there are not a lot of participating mortgage lenders that provide these types of dollars on a loan to cost basis, which is why there’s the participation in the profits. In the case of this particular deal, UDR, a large apartment REIT based out of Denver will likely be the buyer.”
He also mentioned that the cost for the project “is higher than anything that has ever sold in Denver.”
UDR is no stranger to the Denver’s luxury multifamily market. The organization currently owns Acoma, a 17-story community in the city’s Golden Triangle district that currently offers similar characteristics to what Steele Creek will bring to the market.
At eight and 12 stories, Steele Creek will aim to surpass the Acoma in terms of luxury and offerings. When construction concludes, the community will offer studio, one- and two-bedroom floor plans that will present residents with unprecedented views of the Rockies and Denver skyline. Perhaps one of the most notable amenities at the new community will be the infinity-edge pool located on the rooftop deck. The deck will also don cabanas, a hot tub, barbecue areas, lounge chairs and daybeds.
Other notable amenities include a three-story state-of-the-art wellness center that Palmer says will be comparable to “any of the high-end Equinox gyms” in the area. Residents will also have access to and entertainment and media lounge, dog-washing station, Wi-Fi, 24-hour concierge services and an assortment of retail shops and restaurants that are expected to fill the 17,100 square feet of the building’s retail space. Potential retail and restaurant tenants have not yet been named.
The community’s address at 88 Steele Street features a Walk Score of 94 and a Bike Score of 80. The development is located directly across the street from Denver’s famous Cherry Creek Shopping Center which hosts anchor tenants of Nordstrom, Neiman Marcus, Macy’s and H&M. The upscale neighborhood is well-known for its abundance of high-end boutiques and dining.
“Cherry Creek is analogous to Beverly Hills in LA,” Palmer says. “It’s the dining and shopping destination in Denver. It also has a lot of high-end residential, for-sale products such as condominiums and single family homes … There was a lot of pent-up demand for rental properties in the Cherry Creek Neighborhood.”
Construction began on Steele Creek in November and when completed in early 2015 it is expected to fetch an average rent of $2,700 a month or about $3 per square foot. Palmer says that a possibility for some sort of green certification is still being discussed.
“We view Steele Creek as a natural extension of the high-end projects already located in the Cherry Creek area,” says Matt Joblon, president of BMC Investments. “Our investment in Steele Creek combined with the 550,000 square feet of office space that is being developed or redeveloped, will contribute to Cherry Creek becoming one of the premier, upscale live/work play-and-stay destinations in the Western United States.”