A small new hotel is under construction in RiNo, and set to be anchored by a Japanese fusion restaurant with a Spanish name.
Denver-based firms Magnetic Capital, led by Dan Huml, and Narrate Cos., led by Adam Fenton, broke ground last month on a three-story, 23-unit building at 3354 Larimer St., which is leased by San Francisco-based Sonder.
Huml and Fenton purchased the 0.27-acre lot, formerly home to an industrial building, for $2.2 million in May 2019. They said they signed the lease with Sonder that November.
“We really liked Sonder’s approach, and their tech and their growth plans,” Huml said.
The building will also have a 5,600-square-foot restaurant space on the ground floor, which has been leased to Salvaje, a Panama City-born restaurant that has since expanded to other markets such as Paris and Bogota, and which debuted in the U.S. in Miami in early 2021. Menu items include grilled and teriyaki-glazed lamb shank, tandoori chicken on a stick and truffle fried rice with roasted duck, according to the Miami New Times.
“Salvaje is where the tradition and mysticism of the Japanese cuisine allow itself to be brushed with flavors and techniques of places around the world,” the restaurant said in a statement to BusinessDen, going on to promise hand-crafted cocktails and “an incredible and eclectic atmosphere.”
The restaurant, whose name means “wild” in Spanish, also has locations in the works in Dallas, Houston and Atlanta.
Leasing talks are underway regarding a second 672-square-foot retail space in the building, Huml said.
Sonder — which operates in more than 30 cities around the world — leases some or all of what are essentially apartment buildings, then rents the units out for as little as one night. The buildings generally don’t have on-site staff, giving them the feel of an Airbnb. In Denver, the company gets a hotel license instead of the short-term rental license that is typical for Airbnbs, meaning the company needn’t comply with the latter’s “primary residence” requirement.
Sonder already operates two locations in LoHi, and one near the University of Denver, where the company leases a portion of a large apartment complex.
Sonder’s first Denver hotel opened in 2019 at 630 E. 16th Ave., a former hostel building. But the company has ceased operations there.
“Among other factors, this building had historic landmark status, meaning upgrades to the property were difficult to make,” Sonder spokeswoman Fiona Story said.
Huml and Fenton said they bought the Larimer Street property with an operator like Sonder in mind, but made sure the project would pencil as an apartment building in case the hotel component didn’t work out. That kept concerns related to the coronavirus pandemic, which threw a wrench into the hospitality sector, to a minimum.
“At the end of the day, we knew we had the fallback plan, because we were building it as apartments,” Fenton said.
Fenton said the hotel use required slightly different design standards than a typical apartment building, but that those changes — including wider exit stairs and different outlet placements — didn’t necessarily add significant cost because they were part of the design process from the start. Retrofitting an existing building for hotel use would potentially have been more complicated.
“If you incorporate it into the beginning of the project, into the design, it’s really no added cost … so it makes sense for them (Sonder) to do deals that are new construction,” he said.
The building, which the pair hope to complete next March, will have both one- and two-bedroom units, with an average unit size of 695 square feet.
Sonder isn’t done expanding in Denver. Local developer Mike Mathieson, who developed one of Sonder’s LoHi locations, proposed a second project for the company at 2534 18th St. in LoHi in late 2019. Mathieson told BusinessDen Wednesday that he hopes to break ground on the project, which will have about 118 units, in the fourth quarter.
Additionally, a local Sonder executive told BusinessDen in 2019 that the company would operate in a development encompassing a full city block in Jefferson Park. Denver-based Grand Peaks broke ground on that project last fall.
RiNo is already home to a handful of traditional hotels with on-site staff, including The Ramble Hotel, The Source Hotel and Catbird Hotel; a Vib Best Western is expected to open along Brighton Boulevard soon.
Other companies like Sonder that operate in Denver include Mint House (one location in LoDo), The Guild (one in LoHi) and Kasa (locations in Riverfront Park, West Colfax and LoHi).