British billionaire Richard Branson is preparing to expand his swanky hotel chain to Denver, Colorado, adding his name to a lengthening list of high-profile developers and entrepreneurs chasing growth in the Mile High City.
Denver was chosen for the site of the 10th location of Virgin Hotels, Branson's global hospitality flag that has locations in prominent markets such as Chicago, Illinois; New Orleans, Louisiana; Las Vegas, Nevada; and Nashville, Tennessee. The planned Denver hotel, which is expected to include 241 keys, is the latest confirmation of Denver's rising appeal among investors looking to capitalize on rising demand across the city's commercial real estate sector.
“I think as a company we’re always looking at sites that are attractive and always make sense for our brand," Nikolai Ursin, corporate director of marketing at Virgin Hotels, told CoStar News. "We’ve long been looking at Denver in different areas, but this opportunity was a great one to jump at.”
The Virgin Hotels development will be one of two boutique hospitality properties expected to anchor Fox Park, a 41-acre, mixed-use project on the northern end of the city at 4400 Fox St. The project, a joint venture of Mexico City-based Interland and Indianapolis-based Pure Development, broke ground last week.
Formerly home to the Denver Post printing plant, the Fox Park project is part of a long pipeline of developments that have transformed aging industrial sites into a mix of luxury multifamily complexes, high-end stores, office towers and boutique hotels that have collectively fueled rent growth and investment volume for most of the Denver area in recent years. Apartment rents in the neighborhood surrounding the Virgin Hotels site, for example, have climbed more than 4% over the past year to an average of nearly $2,000 per month, according to CoStar data.
By comparison, rents throughout the Denver area average about $1,800 per month.
That growth — much of which has been concentrated in the city's northwestern neighborhoods — have helped push Denver hotel rates, which have climbed more than 36% over the past year, according to data from STR, CoStar's hospitality analytics arm. Growth has been even more pronounced in the high-demand area surrounding the Virgin Hotels site, which benefits from its proximity to downtown Denver, several transit hubs and access to thoroughfares that connect the city to popular mountain destinations.
Average nightly rates in the city's central business district have jumped by about 37% over the past year, according to STR data. A typical hotel in and around downtown Denver averages more than $191 per night, compared to the roughly $136-per-night average across the metropolitan area.
Similar to other Virgin Hotels properties around the world, the Denver location is planned to include some of the hospitality chain's defining features, including its signature Funny Library Coffee Shop, Shag Room cocktail and event space, spa and fitness area, as well as a rooftop lounge. If all goes according to plan, the hotel will open in 2025.
At completion, the Fox Park project is expected to span 6 million square feet of residential and commercial space. The Virgin property will be among a slew of hotel developments expected to elevate Denver's hospitality scene. The $100 million Populus hotel near the city's Civic Center Park is under construction and headed for a late 2023 completion. Meanwhile, the Kimpton Denver Tech Center will land in one of the city's largest employment hubs by 2024.
The Virgin Hotels portfolio is slated to include incoming properties in New York City and Miami. It recently debuted its second international location in Edinburgh, Scotland, earlier this summer.