HomeAdvisor’s new HQ waiting on RiNo project
When it comes to commercial real estate, plans often change. And that appears to be what happened to a proposed eight-story building in Denver’s River North Arts District, where Golden-based HomeAdvisor planned to move its headquarters by 2018.
The Hub Development at 3601 Walnut St. is on hold, say multiple real estate sources. And HomeAdvisor, which assured employees the headquarters move wasn’t dead, said it’s giving HUB developers “a little extra time to look for alternatives,” according to an e-mail sent to employees.
The company still wants to move to downtown Denver, said Brooke Gabbert, a HomeAdvisor spokeswoman.
“We are committed to moving our headquarters to RiNo regardless of what building we end up in,” Gabbert said.
The HUB project, which is from Brent Farber’s Elevation Development Group, did not respond to requests for an update.
HUB submitted plans to the city in early summer and there have been no changes, said Alexandra Foster, a spokeswoman with the city’s Community Planning and Development department.
Plans for the 2-acre property include a 159-room hotel, nearly 250,000 square feet of retail and office space, plus about 400 parking spots for vehicles and nearly 100 bike racks. The hotel would be at the triangle of Blake and Downing streets, near the new Regional Transportation District 38th & Blake Station.
HomeAdvisor, a technology firm that connects home-service contractors to homeowners, announced in July that it selected the HUB for its new headquarters. It agreed to take the top two floors, or about 58,000 square feet, with a move-in date of late 2017 or early 2018. The company planned to relocate about 300 of its technology, finance, product marketing and management employees to RiNo. About 700 sales and operation workers would remain in Golden.
In the past decade, the north Denver neighborhood known as RiNo has been transformed from one filled with aging warehouses to an artist community — and the next hot spot for commercial development. Developers such as Zeppelin Development and Industry built successful office and mixed-used projects, which attracted more development. RiNo has became a market ripe with speculators, and properties have sold for record-high prices.
Projects under construction include Catalyst HTI, a mixed-use space at Brighton Boulevard and 35th Street where the first phase of 180,000 square feet is “40 percent preleased,” and Zeppelin Station, a planned 100,000-square-foot office and retail space at 35th and Wazee streets. Several other projects have been announced, including the World Trade Center campus at 38th and Walnut streets; a hotel next to The Source food market; and a 150,000-squarefoot office development called Revolution 3600 at 36th Street and Brighton Boulevard.
But the real estate community says there are numerous reasons development in
RiNo is cooling down.
The Federal Reserve raised a key interest rate last week, which will mean modestly higher rates on some loans. The Fed also said it will raise rates three more times in 2017, which will make construction projects more costly over time.
In September, Denver’s City Council unanimously adopted an affordable- housing plan that allows for taller buildings in the neighborhood — up to 16 stories. That may have some developers rethinking existing plans.
Another reason development has slowed: This is RiNo, a still gritty neighborhood considered unproven for high-end office space. According to commercial broker CBRE, the RiNo office market averaged leasing rates of $31.44 per square foot of full-service office space at the end of the third quarter. That compares with Denver’s most expensive markets such as LoDo, at $39.09 per square foot, and Cherry Creek at $35.28.
“You’ve got the RiNo market that isn’t necessarily a proven market for office construction,” said Murray Platt, CBRE’s first vice president. “RiNo is very cool and it has a real edge and vibe. But you’re building Cherry Creek office buildings in a RiNo environment. I think the market has to prove itself out.”