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So far Sarah Cullen has created 63 blog entries.

What Opportunity Zones Mean for Denver’s Growth

“Opportunity Zones” are top of mind in Denver’s development world right now. Since the new tax incentive launched in January 2019, developers and investors – really anyone in the commercial real estate industry – have been trying to figure out exactly what it means and how to take advantage of it. While there are multiple opinions on how it will shake out, the general consensus is that it will ultimately benefit Denver’s (and Colorado’s) growth.

Designed as an economic development driver, the federal Opportunity Zone program is part of the 2017 tax reform package aimed at balancing the disparity that still exists between economically strong versus economically distressed communities following the Great Recession over 10 years ago.

In short, it’s a tax incentive to encourage investment in low-income urban and rural communities using “Opportunity Funds,” which are a new class of investment vehicle. The incentive includes the deferral, reduction and potential elimination of certain federal capital gains taxes. (Click here to see a great breakdown of the model.)

Opportunity Zones in Denver

Across the U.S., each state designated Opportunity Zones with input from local governments and community stakeholders. There are dozens of areas throughout Colorado that are designated as Opportunity Zones. In Denver, there are 10 zones in the following neighborhoods:

  • Clayton
  • Elyria/Swansea
  • West Colfax
  • East Colfax
  • Northeast Park Hill
  • Montbello
  • Sun Valley
  • Northeast Westwood

For anyone following Denver’s growth trajectory over the past several years, it should come as no surprise that these areas should be flagged as opportunities for further investment. A lot of these areas were already on developers’ and investors’ radars as development opportunities, and in some cases, projects were already in the works. Now, they have the added benefit of being in an Opportunity Zone. A couple of redevelopments that fall into this category are the Robinson Dairy Marketplace and the Mile High Stadium District in Sun Valley.

The Opportunity Zones program will inevitably spur even more development in these areas, which will ideally create new jobs and opportunities for increased economic activity in the neighborhoods.

Areas highlighted in yellow are designated opportunity zones.

Time Restraints on Opportunity Zones

Contrary to current rhetoric, investments through Opportunity Funds don’t have to take place in 2019, although doing so allows for the maximum tax benefit. Investments can be made through this program through 2026, which allows developers and investors to continue evaluating opportunities over the coming years, rather than rush into major decisions.

Many developers and investors, including Tributary, are taking a cautiously optimistic approach to this new incentive. At the end of the day, a deal in an Opportunity Zone still needs to make financial and business sense. Because investors are required to hold the asset for 5, 7 or 10 years, it requires some patience and long-term planning.

During various panels on this subject, hosted by organizations like Bisnow and ULI, some seasoned experts have speculated that trigger-happy investors might rush into new projects without fully understanding Denver’s commercial real estate landscape. We would echo the advice that anyone looking to capitalize on the program use a trusted developer with both the means and the vision for developing in these areas without the incentive.

Tributary’s Approach to Opportunity Zones  

Bottom line: At Tributary, we believe in intentional development. With decades of experience in Denver’s commercial real estate industry, we’ve seen a lot of incentives come and go. While this program might be a “once-in-a-generation” opportunity – as some have referred to it – we know that deals still need to make good business sense, regardless of any after-tax benefits.

As an integrated real estate firm, we’re able to view the market through the lens of development, investment and brokerage, allowing us to formulate our position with the benefit of multiple perspectives. We will continue to make deals where it makes sense, concentrating our efforts in Denver’s urban neighborhoods.  If those align with Opportunity Zones, great. If not, we remain confident in our ability to contribute meaningfully to the urban fabric and create new opportunities for locals to live, work and play in Denver’s urban neighborhoods.

Top photo credit: Bisnow.

What Opportunity Zones Mean for Denver’s Growth2019-04-02T17:12:55+00:00

High-Performing Buildings and Your Bottomline

‘High-performing’ buildings – a term that has evolved from the concept of ‘green’ buildings – aren’t new to the Denver market, but with so much emphasis put on them in this current construction cycle, it’s important to understand what they mean for your company, your employees, and – perhaps most importantly – your bottom line.

Whether you’re a small-, mid- or large-sized company, you’re faced with a myriad of decisions when it comes to choosing the right office space. While location and amenities are usually top of mind, sustainability is a close third for many of our clients.

With Colorado’s cultural emphasis on the outdoors, taking care of the environment is a natural extension of many companies’ values. And what we’re seeing now is a push beyond just environmental considerations to how sustainable elements can actually impact the wellbeing of employees.

During Bisnow’s recent Denver New Construction and Development panel, multiple industry experts talked about the growing trend of developing buildings in a way that puts the health of their occupants at the forefront of the design. Whether it’s using sustainable construction materials, installing state-of-the-art ventilation, investing in solar panel systems, incorporating biophilic elements (think living plant walls), or capitalizing on the use of natural light, there are a variety of ways developers are creating healthy environments within office settings.

The Denver market has delivered several high-performing office buildings in the past year, including 1144 Fifteenth, 16 Chestnut, The Circa Building, and Riverview at 1700 Platte, among others. Not only are these buildings designed to be environmentally friendly, they also incorporate features to support the health of the tenants who move into them.

While there are numerous benefits (both tangible and intangible) to a high-performing building, the inevitable question is: “Is it worth it?”

Earlier this year, high performance real estate consultant stok (represented on the Bisnow panel) released a new study that quantifies the impact of high-performing buildings on employee productivity, retention and wellness. According to the study, tenants in these buildings can gain $3,395 per employee in annual profit. That’s a number worth noting!

It should come as no surprise that constructing high-performing buildings can come at a premium. In a market where construction costs are already at an all-time high, incorporating green elements requires even more capital. And who ultimately covers those increased costs? Tenants.

(Note: This is one of the reasons many developer’s opposed Denver’s green roof ordinance, which was ultimately modified by Denver City Council to ‘cool’ roofs – read more here.)

As a tenant, you’re probably already seeing an increase in rental rates in Denver, especially in popular areas like the Central Business District, LoDo, RiNo and Platte Street. For high-performing buildings, those rates can crawl even higher. While this shouldn’t necessarily rule them out, it’s an important consideration as you decide where to sign a lease.

Before signing a lease in a high-performing building, here are some questions to ask yourself:

  • Where does sustainability rank among our company’s values?
  • How are we currently caring for the health of our employees through our office environment? Do we want to do something differently?
  • What is the cost/benefit of moving into a high-performing building? What will we gain? What will we have to sacrifice?
  • What type of talent are we looking to hire? Will being in a high-performing building help us attract them?

Leasing an office space in a high-performing building provides an opportunity to make an intentional statement for your company, and if this construction trend continues – which is likely – there will be no shortage of them to choose from. Regardless of where you land, we’re here to help you navigate the process. Click here to learn more about our team.

High-Performing Buildings and Your Bottomline2018-12-13T20:56:39+00:00

Meet Our New Dedicated Brokerage Team

Exciting things are happening at Tributary Real Estate and we are thrilled to share our latest news with you: we’ve officially launched a dedicated brokerage services division!

By expanding our brokerage division and adding a fully dedicated team to this service line, we can better position our clients for long-term success throughout the Denver area. Veteran broker Andy Cullen will lead the division.

Together Andy and Ryan Arnold, partner at Tributary real estate, put together a team that knows the Denver market inside and out. They handpicked each of these team members for their market expertise and commitment to delivering personalized service tailored to meet each of our clients’ specific business needs and goals. (Plus, as you’ll soon see, they’re a lot of fun to work with.)

We can’t wait for you to meet them!
Andy Cullen, Tributary Real Estate Partner and Managing BrokerAndy Cullen, Partner/Managing Broker 
With more than 15 years of experience as a broker, Andy will lead Tributary’s brokerage services division. Andy previously served as a senior vice president at JLL where he specialized in assisting clients with strategic real estate planning, lease administration, disposition, relocation, and portfolio management. Learn more about Andy.

Amy Alridge, Tributary Real Estate Senior Vice PresidentAmy Aldridge, Senior Vice President
An expert at advising scaling companies on office space strategies to accommodate their immediate needs and long-term goals, Amy brings more than 10 years of experience as a broker to the Tributary team. She was previously a vice president at JLL. Get to know Amy.

Jona Behm, Tributary Real Estate Associate Broker and Marketing DirectorJona Behm, Associate Broker/Marketing Director
Jona joins the Tributary brokerage team with five years of commercial real estate experience. Meet Jona.

Daniel Howard, Associate Broker 
An entrepreneur with experience on both the commercial and residential sides of real estate, Daniel brings a wealth of business development expertise to the team. Learn more about Dan.
You’ll be seeing a lot more of this team in the coming months.

In addition to expanding our service capabilities, we are excited to show off our refreshed branding, logo and new website. Take a peek at some of our developments in the works and be sure to stop by our office in Larimer Square to say hello!

Meet Our New Dedicated Brokerage Team2017-09-27T23:27:49+00:00
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