Condo developers edge back into the Denver market

by | Mar 11, 2020 | Blog, Construction, Denver Real Estate Market

In the past decade in Denver, the number of new condos built, much like the weather, has suffered a substantial drought. But it looks like the dry spell is finally beginning to break, with new condo developments on the way.

“We’re seeing increasing density in the metro area in general, and that bodes well for further condo development,” Chris Kinsman, a partner at Davis Graham & Stubbs focusing on real estate development recently told the Denver Business Journal. “There certainly is more courage today than there has been in the recent past.”

The condo drought was spurred, notes the Journal, by the state’s construction-defect law, which allowed HOAs to sue developers for construction problems. This resulted in “a wave of multimillion-dollar construction-defect lawsuits in the early 2000s [that] scared off developers and lenders… bringing new condo production to a near standstill in the metro,” reports the newspaper.

Several years ago, however, the Colorado State Legislature passed reforms to the law, creating a higher bar to suing. Now developers are starting to edge back into the condo business. “[T]he Denver metro is indeed seeing an uptick in new for-sale units,” notes the Journal.

New condo developments include The Laurel Cherry Creek and the Coloradan, near Union Station. Others are in the works: a 314-unit project in Arapahoe Square that will be called Evolve Towers; a 461-unit project at 519 18th Street (according to the Journal, this would be the second-largest condo development in Denver’s history); a 196-unit building dubbed Lakehouse in Sloan’s Lake (this will include rowhomes as well as condos); and an approximately 250-unit project in Uptown.

The goal of Evolve Towers is to offer affordable condos ranging from $365,000 up to about $600,000.  “We cannot be a tier-one city if people cannot afford to buy something downtown,” Evolve’s developer Karina Christensen, told the Journal. “Renting is great, but it’s very transitory.”

While this is encouraging news for those hoping to own, rather than rent, the newspaper notes that the situation remains tentative: “Many developers and lenders are still taking a wait-and-see approach,” it cautions.

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