Sagebrush bullish on Denver-area real estate.
Sagebrush plans three developments near Google campus in Boulder.
Sagebrush also busy in Broomfield, Denver and Lakewood.
Denver-based Sagebrush Cos., one of the most active infill developers in the metro area, plans three developments just north of the Google campus in Boulder.
The Boulder developments include a cutting-edge office building, similar to the award-winning Industry in RiNo.
The Boulder Industry and Arts Center, with an “iconic design,” by Sanzpont Arquitectura and Coburn Architects, will likely be leased to ancillary companies following Google to Boulder, said Donald Caster, a partner at Sagebrush.
Sagebrush paid $4 million for that 2.5-acre site near the Google 330,000-square-foot Google campus on Pearl Street. (Google is the biggest segment of the technology giant, Alphabet, which has market cap of about $548 billion.)
“This will be a “shared,” or “communal” environment similar to Industry,” Caster said.
“It’s got a really cool design by Sanzpont and now all we have to do is figure out how to build it,” he said.
He expects rents to be in the $35 to $40 per square foot range.
Other than the redevelopment of the former Daily Camera building by Randy Nichols, there is little new office space available in Boulder, he said.
“We think with so many ancillary companies following Google to Boulder, there is going to be a huge need for modern office space,” Caster said.
Sagebrush also plans to develop large apartments with rents around $5,000 per month, which Sagebrush expects to lease almost exclusively to highly paid Google employees.
The 32-unit, Boulder Junction Rowhouses, townhome-style rental units will range in size from about 2,400 to 2,700 square feet.
“These are being built solely for Google,” Caster said.
“Google has about 400 employees in Boulder and it will grow to about 1,500. With the average salary of a senior programmer coming to Boulder something around $225,000, they can afford $5,000 a month,” he said.
And because the units are so large, “they are perfect for roommates.” The development is on the west side of 30th Street, just south of Valmont Road. Sagebrush paid about $5 million for the site.
At the same time, with the average price of a home in Boulder around $1 million, he expects most employees moving here will be renting, not buying.
Indeed, he expects that demand for the units will be so great, he hopes to talk to Google about signing a master-lease for the development, so it will have the units available for employees.
“We should break ground on that next year,” he said.
Sagebrush also plans a $12 million, 50-unit boutique hotel in Boulder near the 330,000-square-foot Google campus underway on Pearl Street. The hotel is at 2691 30th St. Sagebrush paid $2.8 million for the 0.94-acre parcel.
“It’s a block north of the Google campus,” Caster said. “The site is surrounded by open space, so we will always have unobstructed views of the Flatirons, unless Boulder changes its mind and opens up that land to development,” he said.
“We paid $2.8 million for that site in March and we just got an offer for $4.25 million,” Caster said.
But Sagebrush isn’t selling the land, at least not yet.
“That just shows you the type of interest there is in Boulder,” Caster said.
“We are opportunistic,” he said, sitting in the Starbucks at West 38th Avenue and Utica Street.
“From here, I can see an apartment project that we fully intended to build, but we got an offer for the land that we couldn’t refuse,” Caster said.
Sagebrush also recently has sold dirt in LoHi and Jefferson Park where it planned to develop projects, but sold the land because it was offered a handsome premium on its purchase price.
Boulder represents only a piece of what Sagebrush is up to.
Meanwhile, Sagebrush also plans about 235-unit, Class A apartment community in Lakewood, which is minutes from the Sloans development of the former St. Anthony’s Hospital campus on Sloan’s Lake.
It will be all or mostly market rate. Caster is speaking with the City of Lakewood about making a portion of it affordable housing, in exchange for some variances on things such as height and setbacks.
He noted that Trammell Crow Residential is getting $2.30 to $2.50 per square foot for its new Class A apartments in Sloan’s.
“We will probably charge a bit of a discount, given that we are on the other side of Colfax,” Caster said.
The Lakewood project will be similar to the nearby TCR as far as quality and amenities, like a swimming pool, fitness center and a courtyard.
The average size of a unit will be 800 square feet.
One advantage it will have is that it is closer to the Lamar light rail station at West 10th Avenue.
“You can walk on a sidewalk all of the way to the station and you don’t have to worry about crossing Colfax,” Caster noted.
Sagebrush also has a 38-unit townhome development on the drawing board on 2-plus acres in Arista in Broomfield. The units will have an average size of about 1,700 square feet.
Sagebrush paid about $2.3 million for the site.
“We think the Arista townhomes will be coming in around $400,000,” Caster said.
“Whoever thought that $400,000 would be an entry-level price in Denver?”
Craine Architecture is designing those units.
Sagebrush also plans 10 townhomes, each with an average size of 1,500 square feet, in Jefferson Park. They will be priced at about $375 per square foot.
Sagebrush paid $1.3 million for the site at West 23rd Avenue and Eliot Street, he said.
“Land has become really expensive in Jefferson Park and LoHi,” Caster said. “I guess prices are so high because people are willing to pay it.”
Those units will be designed by S-Architects.
Caster said he remains bullish on the Denver-area real estate market.
“With only 5,000 or 6,000 homes on the market, and people continue to be moving here from companies like Google and Charles Schwab, I don’t think we have enough homes available to meet the demand,” Caster said.
“And while we are seeing a lot of apartments being built, they are leasing up.”
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