DENVER — When office buildings in downtown Denver started emptying out post-pandemic, restaurants and businesses nearby also suffered. A real estate investor is hoping a new plan can offer a solution for those businesses and families searching for affordable housing.
Maria Gonzales-Bishop has had a front-row seat to the changes downtown from her restaurant, Salvaggio's Deli.
"It's night and day," said Gonzales-Bishop. "It's kind of weird. You look out, and it's like no people walking down the street."
With more people opting to work from home, many office buildings have sat empty. The vacancy rate for downtown Denver offices was 11% pre-pandemic. As of 2024, it's 27%.
"I've had an intuition that this was going to be the biggest opportunity in the real estate market," said Asher Luzzatto with real estate firm The Luzzatto Company.
Luzzatto said he had been keeping his eye on dropping office building values.
"I think we're in a moment where we can take advantage of this dislocation in the market and create the housing that we've needed for years," he said.
The Luzzatto Company bought two skyscrapers near 17th and California for a fraction of their former worth. According to Luzzatto, the buildings traded for $120 million in 2008. The company recently bought them for $3.2 million.
The plan is to turn the empty office buildings at 621 and 633 17th Street into affordable multi-family housing.
"It's really the first one of this scale," said Adam Lyons, deputy director of housing opportunity with Denver's Department of Housing Stability (HOST).
Across the city, HOST reports there are about 55,000 units needed across various income levels. He said projects like this can not only provide more affordable housing options but also give downtown a much-needed economic boost.
"For downtown businesses and our arts and culture venues and all of that to really be as successful as possible downtown. We need the foot traffic. We need the residential base in downtown as well," said Lyons.
The current plan calls for around 700 to 750 units, with mixed-use opportunities at the street level. The project still needs to go through the permitting process, but Luzzatto is hopeful that they can start construction next year.
"We need examples of office-to-residential that are successful and deliver rents that people feel they can afford and bring dynamism back to the urban cores," said Luzzatto.
Denver
Developer to convert empty DTC office building into affordable housing
The rents themselves will be decided after total construction costs are determined.
"The more affordably we can build, the more affordable the rent, so that's the trade-off," said Luzzatto. "We're in architectural design now and expect to get through that in six to eight months, and then our hope is that we would get through the permitting process relatively quickly and be ready to build about this time next year."
It's something Gonzales-Bishop can already imagine.
"It'd be a game changer, really. You look outside, and there are only a few people walking down the street. Now we're going to have kids waiting for a bus, the parents taking the kids. That's totally different, and it's gonna be really great," she said.
Denver7 is committed to making a difference in our community by standing up for what's right, listening, lending a helping hand and following through on promises. See that work in action, in the videos above.