Denver

Denver is upping its efforts to spur property conversions, which could simultaneously breathe new life into the city’s old office buildings and help residents struggling to find an affordable place to live.

A study by Gensler commissioned by Denver officials identified 22 buildings that are “good candidates” for adaptive reuse. Along with the study, Denver’s Community Planning and Development department launched its “Adaptive Reuse Pilot Program in Upper Downtown.” The program matches property owners who are interested in converting their building to residential units with a dedicated project coordinator to walk the applicant through Denver’s entitlement process. 

The moves are Denver’s latest step toward creating more housing out of its underused downtown buildings. Denver has a 21.2% office vacancy rate, one of the highest in the nation, according to data from Avison Young, which means there is unused commercial space that could be converted. Denver’s median home price has also increased significantly since the pandemic began in March 2020. The city’s median home sales price stood at more than $696K in July, a 19% increase over the previous three years, according to the Colorado Association of Realtors. 

Denver officials say they are going to use the results of the report and pilot program to inform their next steps. While a wave of conversions could remake Downtown, some building owners say there are communication issues to work out if the strategy is going to pay dividends for the Mile High City.

“Denver has a long history of successful adaptive reuse, and as the survey indicates, there is a lot of potential downtown to provide additional housing to help transition from a Central Business District to a Central Neighborhood District,” Denver Community Planning and Development Executive Director Laura Aldrete said in a press release.

The city’s latest foray into the adaptive reuse space is more consequential than in previous years, Jon Gambrill, co-managing director of Gensler’s Denver office, told Bisnow. Denver’s downtown core was originally designed around office spaces, but now the city is at a point where it needs to create a central downtown neighborhood with retail options, restaurants and entertainment venues to attract people, he said.

Gensler started with a list of 69 properties selected by the city and county and whittled it down to 29 buildings that it found are possible candidates for conversion. Those buildings make up about 4.8M SF of downtown’s overall office footprint of 30.6M SF.

Twenty-two of the buildings — or 76% of the shortlist — were categorized as “good” candidates, which means developers could likely successfully convert them. That total puts Denver ahead of other cities Gensler studied for adaptive reuse where between 20% and 30% of the building stock was identified as a “good” candidate for conversion, Gambrill said. An additional seven buildings were identified as “possible success,” but Gensler said those properties require further study, and compromise would be needed to make those conversions work.

Sixteen buildings out of the 22 were identified as “top candidates” for conversion projects, and Gensler executed individual feasibility reports for those assets. These buildings make up about 4.3M SF and are spread out across the Central Business District and North Capitol Hill neighborhoods. 

Though adaptive reuse can sometimes be portrayed as a silver bullet that removes obsolete and empty office space while adding needed housing, many factors can prevent a building from being a good candidate. Gensler studied five categories in determining suitability: site context such as walkability and natural light, how the shape of the building would allow for planning unit layouts, floor plates including window to core distance and number of elevators, envelope factors such as window to wall ratio, and servicing such as parking capability. 

Denver would gain a little over 5,000 housing units if all of the 16 top candidate buildings were converted into residential, the survey estimated. Economists at the Common Sense Institute estimate Denver needs to build between 31,000 and 49,000 units to keep up with population growth through 2028.

Adaptive reuse could also help Denver meet its greenhouse gas reduction goals, Gambrill added. The survey estimates that the city could save between 194 million and 268 million kilograms of carbon dioxide by converting the top 29 buildings instead of tearing them down and starting over again. That greenhouse gas reduction is like removing emissions from nearly 20 coal-burning electric plants from Denver’s atmosphere, according to estimates from National Geographic.

Some of the buildings identified for conversion include the LoDo Towers at 1401 17th St. and Trinity Place at 1801 Broadway, which is anchored by Bank of Colorado on the ground floor. Gambrill said Denver was focused on identifying “clusters” of buildings in older areas of town that are near public transit options because they lend themselves to creating a micro-neighborhood that can then expand into other areas of town. 

Half of the top candidates for conversion are located along either 17th Street or Broadway, two of Denver’s most historic streets. 17th Street is sometimes referred to as the “Wall Street of the West,” after a crop of new towers built in the 1970s and 1980s became home to financial firms, real estate brokerages and other business services companies. Similarly, Broadway has grown from being Denver’s central streetcar line to one of the city’s busiest thoroughfares. 

Gambrill pointed to Cherry Creek North as an example of what Denver’s downtown core could look like in the future, if the city converts most of the 22 identified buildings. Cherry Creek North started as a residential neighborhood with restaurants and retail, but has slowly added office space to accommodate increased business travel to the area.  

“For a lot of the buildings downtown, it seems like they have a pathway to being converted into another use like multifamily,” Gambrill said. “Others may decide to wait and see how the return-to-office movement plays out to see if converting makes sense.”

Despite the elevated focus on adaptive reuse, some building owners say communication from the city has been lacking. Rob Naiman, who owns the University Building at 901 16th St., told Bisnow the city had not notified him that his building was a prime target for adaptive reuse. The building scored a 91% for adaptive reuse compatibility, which the survey showed was driven by its floor plan and site context. It also has an estimated 51% vacancy rate between its office and retail spaces. 

Naiman said he has previously hired architects and consultants to see if the building could be converted into residential spaces. He said he never followed through on any of the findings, but the city’s new adaptive reuse initiative could spur him to action. 

“With downtown not being what it used to be, I guess we’ll need to start looking at these things more seriously,” Naiman said.