January 8, 2013
From The Denver Post http://www.denverpost.com/business/ci_22314721/denvers-highland-neighborhood-enjoying-development-resurgence?IADID=Search-www.denverpost.com-www.denverpost.com
By John Mossman
The Highland neighborhood, for the first time, boasts some higher-end housing that is competing with traditionally tonier Cherry Creek.
The northwest Denver neighborhood has been experiencing a low inventory of newly built condos. In September, not one new-construction condo was on the Multiple Listing Service.
"There is still a huge lack of inventory," said Paul Tamburello of Red Chair Realty Advisors. "I think the economic downturn didn't hit Highland as bad, so people were still developing. They trusted that the market was coming back."
Somewhat quietly, $1 million-plus homes were being built in Highland.
"Whatwas interesting about it was none of them at the time were spec homes; they were all custom," Tamburello said. "These were families buying land, building a custom for themselves over $1 million — in some cases $2 million, $3 million — all in Highland."
Added Red Chair colleague Rick Flanagan: "They were buying it, building it, moving in — and it never hit the market."
Deviree Vallejo, a broker with Kentwood City Properties, said the entire neighborhood — which once was a tough, working-class area of mostly unassuming and aging brick bungalows — is undergoing a metamorphosis.
"It's fascinating to see what has happened, how popular Highland and Lower Highland have become in the last four years," Vallejo said. "Now, there's a demand for $1 million homes. A couple of years ago, you wouldn't have dreamed of building a million-dollar house in Highland."
Highland — bounded by West 38th Avenue on the north, Interstate 25 on the east, the South Platte River on the southeast, Speer Boulevard and West 29th Avenue on the south, and Sheridan Boulevard on the west — is one of Denver's oldest neighborhoods.
Now, it's also one of Denver's hippest — with art galleries, restaurants and several historic districts, including a row of architecturally impressive brownstones, as well as new housing.
An empty-nester appeal
"The demographics have changed," Vallejo said. "Highland is still edgy, but it went from people taking a risk to now being one of the most in-demand neighborhoods in Denver. As more money started coming in, developers responded with a higher-end product.
"It used to be young couples and single people. Now, we're seeing a huge number of empty-nest couples — people in their 50s and 60s who had sprawling homes in the 'burbs that were too big after their kids were gone. They wanted walkability and a neighborhood with its own feel and vibe, and that's Highland."
Jan Nelsen, also with Kentwood City Properties, moved from Cherry Creek to Highland in April.
"I work with people who have always thought of Cherry Creek as the place to move to when the kids move away," Nelsen said, "and now they're calling me to look at Highland."
With the rise in housing prices comes the question of affordability.
"I think Highland will be affordable for the next few years," Nel-sen said, "but it's time to get in now."
Added Sherman Miller, executive director of the University of Colorado Real Estate Center: "I still think there's product that people can get into. I think developers are sensitive to that."
Miller likes what he sees in Highland.
"Adding density usually increases the vibrancy of the market," he said. "And with all the changes, they've been able to keep the character of Highland and build some really nice product that has gained a lot of traction in the marketplace. It's been leasing up rapidly and selling well. They haven't just scraped everything down."
The transformation of Highland is not without its critics, however. Residents of West Highland went to court in an attempt to stop RedPeak Properties from building a luxury apartment complex — three five-story buildings — near West 32nd Avenue and Lowell Boulevard.
They claim the Denver City Council made a substantial change in zoning within the primarily residential neighborhood and said the "spot zoning" negatively affected their properties. In September, a Denver District Court judge refused to dismiss their suit, and a trial is set for late May.
Highland's housing revival began in the 1980s and 1990s with projects west of Federal Boulevard, around the area known as Highland Square. Very little was going on east of Federal until Wally Hultin developed the Overlook in the late 1990s. Then, three other projects followed: Tamburello developed Highland Lofts, Loup Development did Shoshone Lofts, and Engleberg & Wright developed Highland Crossing — all multiunit condo buildings.
"On the bandwagon"
In 2003, Tamburello and then-partner Stephanie Garcia teamed up on the redevelopment of a portion of the old Olinger Mortuary complex at West 30th Avenue and Tejon Street in what Realtors refer to as Lower Highland. The result: two restaurants — Vita and Lola — and the Little Man ice- cream shop.
"That signaled to restaurants and retailers that something was going on in Highland and that they had better get on the bandwagon," said Tamburello, who is sometimes referred to as the father of Lower Highland, or LoHi.
Then came townhouses with a modern design that transformed the area.
"The project that was absolutely catalytic was Bill Moore's Sprocket Design-Build project at 18th and Boulder (streets)," Tamburello said. "He again changed the paradigm of development in Highland."
Addressing a shortage of upper-end townhome product, developer Ray Kawano recently began building Tejon34, and Jerry Glick started work on Zuni Townhomes. Units in the first phase of Tejon34 were priced from the high $700,000s to $900,000. Four of the Zuni units were priced in the $1 million range, and Glick moved into a $2.5 million penthouse on the site.
"People never knew there was this trend of $1 million-plus homes in Highland," Tamburello said. "If you were looking for $700,000-plus townhomes, you would look at Cherry Creek, Bonnie Brae, Hilltop, Riverfront. It wasn't on anybody's radar to consider Highland."
Koelbel Urban Homes, meanwhile, began a townhome project on Vallejo Street with units starting at $385,000.
Highland Park Apartments, which opened in June at West 30th Avenue and Zuni Street, was 100 percent leased almost immediately, making a grand opening unnecessary.
Walkability, a sense of community, a more stable neighborhood and improving schools are reasons for Highland's success. It hasn't hurt that there now are more than 55 restaurants or coffee shops in Lower Highland, up from 22 in 2006.
"We're still edgy and gritty and interesting and diverse, but we're also stable in the sense that someone is willing to put up $900,000 and they're not worried about whether they're going to get it back," Tamburello said.
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