A Texas-based real estate development company was considering other markets as they continued to grow their brand. In prior years, they had successfully penetrated Austin, San Antonio, Dallas, and, most recently, Seattle, by developing single-family and multi-family properties. They were now exploring Denver as their fifth market.
The client was seeking suitable land for the development of an urban, multi-family condo complex. Having explored a variety of markets, the client knew an experienced broker could be a strong asset to help them find the perfect development parcel late in the development cycle. The client engaged CCIM-designated broker, Lowrey Burnett, to identify sites available for purchase that aligned with the client's location and purchasing model.
Denver was the target market that the client and their stakeholders began considering as the city for their fifth flag - though it was late in the economic cycle. Unfortunately, that meant that many desirable infill urban sites had already been acquired and, in some cases, already redeveloped. The majority of the remaining, available urban development parcels had zoning issues or were excessively priced by sellers who hoped to take advantage of inexperienced or under-represented buyers.
As an experienced buyer's representative, Burnett knew that there were hidden gems left in the city. He performed extensive research to find an under-valued parcel. What he found was a 0.8 acre parking lot that had fallen out of contract, but was situated in an ideal location, just northeast of Denver's Central Business District. Improving upon the already attractive nature of this parcel, the parking lot generated rental income that would offset the client's debt-service expense during the preconstruction phase of the project. Additionally, Burnett was able to negotiate favorable sell-financing to the benefit of his client.
The condo development was underwritten, for purchase pricing purposes, based upon a three-story development. However, the client was able to achieve a much higher-density development that results in a much higher return on investment.
The client successfully closed on the covered-land play, acquiring the parking lot for $3.75 million. Depending on the final project height, the client expects to spend $16 to $20 million on the new development project.
Burnett acted as a buyer's representative for the acquisition of land for development near downtown Denver, Colorado.