In the past five years, prices for the land surrounding light-rail stations have doubled and, in some areas, tripled on a cost per-square-foot basis. One example is the Village Center Station near the Arapahoe light-rail station. About four years ago, the land was valued around $21 a square foot, and now it’s $60 a sf. At the other end of the line, property downtown within proximity of light rail has skyrocketed. It now ranges from $300 to $600 a sf.

“The trend is transit.” “That’s where all these companies want to be. They want to be within close proximity to transit for the purpose of their employees.”

In the past, company executives decided an office’s location and the employees would follow, This often meant the location was convenient to the executive’s residence. Today, that’s reversed. Companies need to go where employees want to be, and employees want to be urban and they want to be at transit, he said.

Not only is it important to tenants and employees, it affects investors as well. “It’s becoming more and more important to investors to be by light rail. About five years ago, one client looking at the market in two ways – central business district assets and suburban office assets – they had started looking at the market in three ways – CBD, suburban and transit-oriented. This thought process has only escalated since then, he said.

Developers and investors are placing their bets downtown on assets within proximity to Union Station. The two highest-priced office buildings that have sold in metro Denver are still the two office buildings adjacent to Union Station. “You cannot recreate those two buildings again, and they are at Main and Main for transit”.

Other successful downtown transit-oriented office projects include 1551 Wewatta, 1900 Sixteenth, the Triangle Building and Dairy Block. All are fully leased or well on their way.

Moving into the suburban southeast, recent TOD projects include the Denver Design District near the Alameda station, the repurposed 990 S. Broadway building at the Broadway station, the mixed-used Colorado Center plans for the Colorado station, One Belleview Station at the Belleview station, Triad at the Orchard station, CoBank and the third Village Center Station project at the Arapahoe station, Panorama Corporate Center at the Dry Creek station and others.

Migrating off the SES corridor, another active office area is the River North neighborhood. The submarket has a large footprint, but the light-rail station at 38th and Blake is going to be the center point, which will be anchored by the World Trade Center campus. With a large international draw, the trade center project wanted a transit-oriented location in order to take advantage of the new train to Denver International Airport.

“If you look at land values in RiNo, you’ve seen ground appreciation that’s off the charts over the last five years – maybe the fastest-appreciating land in the entire metro area,” Lee said.

Another area playing its light-rail proximity well is Stapleton’s Central Park station, which will open in late April. The city held off marketing the real estate until the station was within sight of opening in order to make the land as valuable as possible. A 6 million-sf master plan calls for densities of office, residential, multifamily, retail and hotel.

Land values went from $14 to $15 a sf up to $45 a sf over a three-year time frame, he said. “You’ve really seen substantial appreciation of value on a square foot basis,” he said. “That’s the price today, but as more development occurs, those prices could easily go up to $60 to $90 a square foot.”

Stapleton residents who work downtown report the highest drive-alone numbers of all commuters coming into downtown Denver, according to the Downtown Denver Partnership. The partnership, which tracks commuter behavior for downtown employees, is eager to see how commuting habits for Stapleton residents will change once the station opens. 

Denver, Colorado

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