Closing time has come and gone for a former downtown Denver bar that's on a site set to be transformed into the city's newest luxury apartment tower.
Local real estate investment firm Trailbreak Partners is expecting to break ground later this month on a $160 million multifamily project at the long-shuttered LowDown Brewery & Kitchen.
The 18-story tower, expected to include some ground-floor retail, would add another 295 high-end units to the region's multifamily market after years of unprecedented growth. Denver still touts one of the most active apartment construction pipelines in the country.
Trailbreak's plan for the sites at 800 and 808 N. Lincoln St. extends back to 2022 when the firm submitted its initial proposal. It paid a little more than $12 million for the Capitol Hill parcels later that year, and in the time since has tweaked and fine-tuned the project as Denver's apartment market has become increasingly concentrated on the higher end of the quality spectrum.
Along with the typical parking and fitness center elements, the latest iteration of the Capitol Hill project is set to include wellness-focused amenities such as a Nordic cold plunge, sauna, a spa area that offers massage and acupuncture services, an infinity pool, and a two-story rooftop lounge.
Trailbreak recently secured a $111.5 million loan through Affinius Capital to finance the project.
Growing footprint
The area around Capitol Hill has been among some of the fastest-growing pockets in the city that have attracted the bulk of new apartment construction over the past several years, a pipeline for which top-tier units account for about 75%. While the cost of capital and supply concerns have slowed the pace of new multifamily groundbreakings, there are still more than 15,000 units underway across greater Denver that are expected to extend the region's supply-demand imbalance.
Even with trendy amenities or locations in some of Denver's most popular neighborhoods, the record influx of units has softened rents, and the market-wide average has fallen by more than 3% over the past year.
Developers have also increasingly turned to concessions in the earlier lease-up stages to compete for tenants and fill up newer properties, especially in areas such as downtown where there are plenty of recently completed options.
Despite the near-term challenges, developers are pointing to the slowing construction pipeline and the city's strong economic backbone as indicators that Denver is still worth the bet.
For Trailbreak, the firm's Capitol Hill plans are the latest addition to its growing footprint across the region following a handful of recent acquisitions as well as other ground-up development projects.
“Over the past year, we’ve gained better visibility into the new normal of higher interest rates, have seen inflation moderate and have started to see price discovery stabilize," Trailbreak co-founder Doug Elenowitz told Bisnow in November. All of that has given "local groups more confidence to step in."