A heavyweight New York developer is making its Denver debut with a project it thinks will make its mark in one of the nation's most active cities for apartment development.
Manhattan real estate firm RXR is expanding the scope of its residential development portfolio by breaking ground on the Ave Station House, a luxury 300-unit apartment complex in Denver's popular RiNo district.
"From day one, our focus has been on a differentiated residential product that would stand out among the growing development activity in Denver," Joe Graziose Jr., RXR's president of construction and development, told CoStar News. He added they are aiming to offer a "hassle-free alternative to traditional renting and a level of flexibility that meets the needs of today's modern renter."
While that may sound like a version of the typical developer pitch, RXR is banking on a combination of features as it tries to go beyond monotonous options that could be found in any other city across the United States.
The 301-unit complex at 4001 Walnut St. is up the street from the Regional Transportation District’s 38th and Blake rail stop and will include about 6,000 square feet of retail space; larger floorplans with up to three bedrooms; an on-site service team; and more than 18,000 square feet of indoor and outdoor amenities such as co-working spaces, a fitness center and spa, a golf simulator, an outdoor pool and rooftop spaces.
RXR is building the nearly $104 million project with partners Invent Development Partners, Halpern Real Estate Ventures and Korman Communities. It will land in a pocket of the city already saturated with recently completed or underway developments, making the project a test of demand for specialized properties.
Yet Graziose Jr. said RXR's roots in New York give it an advantage in terms of working in "highly competitive, high-barrier markets."
He also said "that discipline carries over. It means being thoughtful about design, how a building fits into its neighborhood."
In Denver, "we're not trying to replicate New York. We see an opportunity to bring a more hospitality-driven approach to the market."
'Growth over time'
The project will be the latest addition to RXR's growing residential portfolio that spans about 35 properties and is valued at more than $6 billion. What's more, it's expected to anchor the developer's expansion plans in and around the Denver area for years to come.
"Denver has stood out as a dynamic and high-growth market," Graziose said, pointing to the region's growing population, solid economy and vibrant neighborhoods such as RiNo. "We've been intentionally expanding our residential platform in high-growth markets across the country, and Denver is a natural fit for that."
The area around RiNo, in particular, has been one of the fastest-growing pockets in the city, attracting the bulk of new apartment construction over the past several years. Top-tier units account for about 75% of that pipeline.
While the cost of capital and supply concerns have slowed the pace of new multifamily groundbreakings, there are still more than 10,000 units underway. That has added another challenging layer for landlords scrambling to lease up their properties.
The record influx of units has softened rents, and the market average has fallen by 3.5% over the past year. That saturation has meant developers have 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 such as RXR and its partners are pointing to the slowing construction pipeline and the city's strong economic backbone as indicators that Denver is still worth the bet. And with Ave Station House's estimated completion date marked for 2028, the development team is certain that the market will have worked its way through the current oversupply issues and has returned to far more solid footing.
It "comes down to timing and alignment," Graziose said, adding that the "neighborhood is maturing in the right way."
"While this is our first multifamily project in Denver, we view it as a meaningful step in building a long-term presence here," he added. "We're not coming in for a single project — we're looking to be part of the city's growth over time."