Want to get a jump-start on upcoming deals? Meet the major Denver players at one of our upcoming events!
A building with a neon blue sign that reads “Stanley” lights up the streets of Aurora, Colorado. At first glance, the building’s exterior resembles an industrial facility or manufacturing plant. But inside lies a food hall and community marketplace, featuring a variety of vendors, from breweries and cafés to fried chicken and taco joints.
The food hall goes by the name of Stanley Marketplace, a nod to its former life as a factory for airplane seat manufacturer Stanley Aviation.
It is just one example of the adaptive reuse boom happening in the Denver area. Adaptive reuse gives developers an opportunity to preserve historic structures and create attractive mixed-use spaces using fewer resources. But as new residents move to the city and enjoy adaptive reuse developments like Stanley Marketplace, longtime residents could fall victim to the city’s affordability crisis.
Denver and its suburbs have seen multifamily rents skyrocket, fueled by an influx of people moving to the area. Since 2010, Denver’s economic growth and low unemployment rate have attracted over 100,000 residents to the area, Mic reports. The affordable housing supply has not caught up with the area’s growing population. Denver placed fifth on Nationwide’s list of U.S. cities with the fastest-declining housing affordability, behind San Jose, San Francisco, Seattle and Oakland.
While many adaptive reuse projects don’t directly limit access to housing across the region, the trend has played a role in increasing the cost of living in the area. Longtime residents are fearful that some of these projects could indirectly drive prices up further. For example, Denver’s historic Union Station was transformed into a cultural hub with restaurants, bars, high-end retail and luxury hotels. This redevelopment has revitalized the area and promoted a variety of local business, but it has also attracted people who can afford to shop and dine at these luxury stores and restaurants. Lower Downtown Denver, or LoDo, where Union Station is located, is now the fourth-most-expensive neighborhood in the city.
Residents in other neighborhoods around the region are also seeing the impact of adaptive reuse projects, but on a smaller scale. A former Sports Authority HQ building in Englewood was recently transformed into the largest climbing gym in the U.S. The Earthtreks climbing facility, which opened at the end of August, offers individual monthly memberships at $79/month or $890/year.
Adaptive reuse projects like fitness centers and climbing gyms often target former warehouse and industrial facilities in up-and-coming neighborhoods. The trend is not unique to Denver. In New York, the former New York Daily News Garage was transformed into a climbing gym in Gowanus, an emerging Brooklyn neighborhood that at the time saw little development. Today, a number of residential and commercial properties have popped up, and the cost of living has increased significantly. The median price of a home increased 68% in 2016, Property Shark reports. In Q2 2018, the neighborhood was ranked as the 12th-most-expensive neighborhood in New York City. In time, parts of Denver could see a similar shift as adaptive reuse projects pave the way for further development.
Some developers recognize the impact this development could have on residents, and have created projects aimed at making adaptive reuse more inclusive. A number of real estate professionals have turned their focus to transforming nonresidential assets into affordable housing. For instance, AU Associates founding principal and President Holly Wiedemann has transformed a hospital, a post office and 11 schools into affordable and mixed-income housing in Kentucky and West Virginia, Multifamily Executive reports.
“Schools are wonderful buildings to recycle,” Wiedemann said. “They generally have generous hallways, high ceilings, abundant windows that create light-filled apartments, and are incredibly sturdy. Their usual layout is double-loaded corridors, which makes for a building that still retains a familiar old-school feel after it’s transformed.”
This type of development has its challenges, and many areas have zoning regulations that can make it difficult to redevelop certain assets. While developers in Denver have been slower to implement affordable housing initiatives into their adaptive reuse projects, they are beginning to look for opportunities. In July, Zocalo Community Development announced plans to turn a historic building at 101 Broadway, which originally served as a hotel in the early 1900s, into 102 affordable housing units.
“We’re really looking forward to bringing new livelihood to the Baker neighborhood," Chris Schillinger, the senior project manager at Zocalo Community Development, told the Denver Channel. "[We’re] taking something that has been here a long time, and instead of knocking it down, we’re rehabilitating it, and serving the needs of the community."
As the affordable housing crisis in Denver continues to worsen, developers are looking for ways to use adaptive reuse as a force for good.
This feature was produced in collaboration between Bisnow Branded Content and EBI Consulting. Bisnow news staff was not involved in the production of this content.