X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

DENVER-Grant Barnhill, a local broker and real estate investor, made a lot of money during the city’s hot real estate market of the mid-1990s by buying and renovating inner-city apartments and the occasional office building and then selling them fairly quickly. “I did traditional rehabs,” Barnhill tells GlobeSt.com.

Investors with him realized a 60.5% return, he says. After taking a couple of years off to travel around the world, Barnhill returned to Denver and hooked up with 15-year veteran of investment real estate, Zvi Rudawsky. Barnhill and Rudawsky recently launched a private real estate equity investment fund called Portus, which buys run-down buildings in the inner-city neighborhoods of Denver and turns them into trendy boutique hotels with a theme.

Their first building is called Aperture at 1777 Williams St. in the city’s Uptown neighborhood east of the Central Business District. On the outside, it is an unremarkable building. In the secured entryway, however, are about 500 cameras built between 1900 and 1960. Barnhill purchased them on e-Bay over a six-month period. The walls inside are covered with photos, many of them that Barnhill shot while traveling to places such as Cambodia and Katmandu. There’s no reason to give it a photography theme, except that is something that Barnhill is interested in, he freely admits.

Down the street is another building called H2O. It has a water theme. Again, there is no reason to have piped in water sounds at the entryway, and acrylic shaped circles shaped like water drops on the walls, other than they decided to give every building a theme. A third building they’ve bought and are renovating will have a factory theme.

“I got the idea while traveling in Spain and I stayed in boutique hotels,’ Barnhill tells GlobeSt.com. “I think our renters are the type of people who would stay in boutique hotels when they travel.”

The market he and Rudawsky are going after is the so-called “Creative Class,” detailed in Richard Florida’s book by the same name. It is a book that Mayor John Hickenlooper often alludes to in speeches for his vision of Denver’s future. Members of the Creative Class typically are 22 to 35 years old, who can’t yet afford a home, or rent an expensive Downtown loft, where the rent can easily top $1,000 a month.

Rents in their buildings are in the $495 to $595 range. They’re getting an average of $1.72 per sf in rent, 52% higher than the average rent in the Uptown submarket of $1.13 per sf. The two often are on the lookout for “troubled” buildings that are frequented by prostitutes and drug dealers. After renovating the buildings, they raise the rents. At the H2O building, for example, they raised the rents by about $200 per month, and were 100% occupied five weeks after opening–all of it by word-of-mouth advertising.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.