Developer seeks financing to convert DTC office into income-restricted housing

A Denver developer has put forward what appears to be the first post-pandemic office-to-residential conversion project in the southern part of the Denver region.

“What we’re trying to do here is create an environment where there’s affordable housing in proximity to where folks work,” said Peter Culshaw.

Culshaw is executive vice president of Shea Properties, a firm which submitted plans last month to convert the 4340 S. Monaco St. office building into 143 income-restricted apartments. The project would be purely residential, with studios to four-bedroom units renting from 30% to 70% of the area median income (AMI).

The proposal joins a handful of residential conversion projects that have been floated downtown since the pandemic altered the office-leasing landscape.

Shea is under contract to buy the building. It last sold in 2006 for $69.3 million and has been vacant for at least five years, Culshaw said.

The office property, constructed in 2001, spans 124,000 square feet across four stories. No major changes to the exterior or surrounding parking lot are expected. The project would be funded with an array of tax credit and public financing methods. It has secured a $6 million bond from Denver, but Shea is seeking millions more in city and state funding/tax credits.

“We don’t know if the economics work yet. Everything is expensive,” Culshaw said.

He declined to share specific figures, but planning documents say that the project cost would work out to $315,000 per unit.

What’s missing from the DTC, he said, is affordable housing. In the past seven to eight years, his firm has built around 650 units of income-restricted apartments. In general, Shea has delivered more than 3,000 apartments in the past decade.

“Over the last 20 to 30 years, we’ve actually made a conscious effort to introduce more residential housing into the DTC,” Culshaw said.

Culshaw, 65, said the project incorporates the combination of three things which his firm specializes in: multifamily development, office buildings and affordable housing.

“We’re combining three core expertises. I’m really excited to see if we can pull it off,” he said.

It won’t be long before Culshaw and his team know if the funds will be there for them to use. By June, there will be a clearer financial picture of the project as more city and state agencies announce recipients of funding, he said.

If all goes to plan, Shea will close on the property by January of next year, according to a timeline that the firm sent to the city.

The Monaco development is about 2 miles from the site of another Shea property, the Marina Square shopping center.

Located at the northeast corner of Belleview Avenue and Ulster Street, Shea has proposed redeveloping it into 40,000 square feet of retail space, 450 apartments and an office building, Businessden previously reported.