Hines Doubles Down on Timber With Denver Project

T3 RiNo. Image courtesy of Hines

Hines and partners McCaffery and Ivanhoé Cambridge have begun construction of T3 RiNo, an approximately 240,000-square-foot, heavy timber office building in Denver’s River North Art District. The project is part of Hines’ signature T3—timber, transit and technology—office concept.

And perhaps there should be another T, for trophy. “Trophy new construction product has continued to garner strong leasing activity at top-of-market rates as employers compete in the fight for talent,” Alexandra Morton, project manager at Hines, told Commercial Property Executive.

“We continue to see growth in tenant demand here in Denver. Over 30 companies have expanded or opened a headquarters location in Colorado since 2018. There are also nearly 2 million square feet of active requirements currently looking for space in the market. Paired with that, there is a true flight to quality for differentiated product in Denver.”

Designed by Pickard Chilton Architects and DLR Group, T3 RiNo will be a sustainable, wellness-centric workplace, as well as an amenity-rich destination, with roughly 17,000 square feet of retail space, hospitality-driven social areas and private outdoor terraces. No one is discussing development costs for the project; however, the ownership team obtained a loan on the property of just over $90.9 million, earlier this week on Nov. 1.

READ ALSO: The Story Behind Hines’ T3 Eastside in Austin

The six-story wood building will take shape at 3500 Blake St., a site that had been home to a small industrial facility when the Hines team acquired it for approximately $11.2 million in 2019. Hines et al held a ceremonial kickoff for the project in February 2020; however, timing was not on the partners’ side.

“Less than a month before the first wave of the pandemic surged, we celebrated the groundbreaking of one of the most environmentally friendly and sustainable developments in Denver,” Ivanhoé Cambridge noted in its 2020 activity report. And as Avison Young remarked in its first-quarter 2020 report, Hines and partners were among a group of Denver developers that temporarily halted projects as the COVID-19 health crisis took hold. Now, T3 RiNo is back on track, and its anticipated delivery date has been pushed back from spring 2022 to fall 2023.

When no move is the right move

Hines, McCaffery and Ivanhoé Cambridge’s decision to postpone construction of T3 RiNo may very well have been a prudent one, as the delayed delivery will give the Denver market much-needed time to recover. As per Newmark’s third-quarter 2021 report, metro Denver has continued to record negative absorption since the second quarter of 2020, with the 2021 year-to-date figure at -2.6 million square feet.

On the bright side, there is light at the end of the tunnel—and it is visible. “Continued job and population growth are forecasted to continue through the next several years, and the anticipated strong pent-up demand for high quality space in select markets, combined with a restrained development pipeline, will likely turn the corner to positive absorption in 2022,” according to the Newmark report.

By the time T3 RiNo is ready for occupancy, the Denver market should be quite hungry for trophy product. “T3 RiNo’s delivery in 2023 will be ahead of 3.1 million square feet of additional projects that are planned in CBD & RiNo,” Morton said. “There is inevitably a tightening of new construction supply as a result, limiting the amount of available new construction space that tenants are flocking to. T3 RiNo will deliver 238,000 square feet of trophy timber office space with top-tier amenities, offering a unique user experience.”