HomeAd­vi­sor’s new HQ wait­ing on RiNo project

The Denver Post - - BUSINESS - By Ta­mara Chuang

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.”

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