Doug Elenowitz addresses the crowd at Tuesday’s groundbreaking event. (Matt Geiger/BusinessDen)
Doug Elenowitz broke ground on his apartment development in a “different world” compared to when he bought it.
“We started working on it in early 2022, closed right at the end of 2022. During that time, the interest rate environment shifted, and our underwriting contemplated that it was going to be a different world. We were knowingly making that decision at that point in time, so it didn’t totally get us, catch us off guard, but certainly the economics of it changed,” Elenowitz said.
Elenowitz is the co-founder of local development and private equity firm Trailbreak Partners. On Tuesday, his company held a groundbreaking ceremony to mark the start of construction on an 18-story, 295-unit apartment building at the northeast corner of 8th Avenue and Lincoln Street in Cap Hill.
The project is slated to cost $160 million, according to Trailbreak. The firm purchased the 0.8-acre site, formerly home to Lowdown Brewery + Kitchen and a handful of retailers, for $12 million in December 2022.
A rendering of the apartment development. Baltimore-based Hord Coplan Macht is the project’s architect. (Courtesy Trailbreak Partners)
There’s been a lull in recent apartment groundbreakings. While various projects are under construction in Denver, most got out of the dirt years ago, when interest rates and construction costs were lower.Â
The Cap Hill site’s rectangular shape and the project’s design and lack of underground parking helped keep costs reasonable, he said. Costs are expected to increase by 1% to 3% if existing tariffs remain, but Elenowitz said he has a guaranteed maximum price contract with general contractor Arco/Murray that will prevent going drastically over budget.
“How we’re approaching it right now is weekly meeting[s], talking about every component that has a meaningful dollar value within the construction. What is the origin of the materials by nation? And are there alternatives that we might look at, either domestically or in countries that are less impacted?” Elenowitz said.
While most large buildings are financed by “institutional” funds, Elenowitz said, he sourced his cash from a network of high net worth investors. They’re less likely to sit on the sidelines like an investor into a bigger discretionary real estate fund might, he said.
The hope is that the timing will pay off. The project is expected to be completed in the back half of 2027, a time when few other apartments look likely to be coming online.
“If we’re building and opening up into an environment where people are delayed, it gives us greater resiliency,” Elenowitz said.
Councilman Chris Hinds spoke at Tuesday’s event. (Matt Geiger/BusinessDen)
The building — dubbed “Kaia,” Scandinavian for “pure” — will have 19 income-restricted units and 8,500 square feet of ground-floor retail. Half of that will be reserved for traditional storefronts and food and beverage operations, while the other half will be for “wellness” users such as acupuncturists, spas or even Reiki healers.Â
The building will also include a cold plunge, sauna, two-story rooftop lounge and an infinity pool.
At the ceremony, Denver City Councilman Chris Hinds, who represents the area, noted that Kaia was also the name of his first dog, who he rescued in 2002. He said she later rescued him after a crash while cycling that left him wheelchair bound.
“I rescued her in 2002, she returned the favor in 2008 and she rescued me,” he said. “And I see this project, among others, as a way to help Denver rescue unaffordability and create housing where we have so many people still on our streets.”
“I want to thank you so much for persevering with this market and providing additional housing and affordable housing for us in the city,” Councilman Hinds said to Elenowitz at the event.
Doug Elenowitz addresses the crowd at Tuesday’s groundbreaking event. (Matt Geiger/BusinessDen)
Doug Elenowitz broke ground on his apartment development in a “different world” compared to when he bought it.
“We started working on it in early 2022, closed right at the end of 2022. During that time, the interest rate environment shifted, and our underwriting contemplated that it was going to be a different world. We were knowingly making that decision at that point in time, so it didn’t totally get us, catch us off guard, but certainly the economics of it changed,” Elenowitz said.
Elenowitz is the co-founder of local development and private equity firm Trailbreak Partners. On Tuesday, his company held a groundbreaking ceremony to mark the start of construction on an 18-story, 295-unit apartment building at the northeast corner of 8th Avenue and Lincoln Street in Cap Hill.
The project is slated to cost $160 million, according to Trailbreak. The firm purchased the 0.8-acre site, formerly home to Lowdown Brewery + Kitchen and a handful of retailers, for $12 million in December 2022.
A rendering of the apartment development. Baltimore-based Hord Coplan Macht is the project’s architect. (Courtesy Trailbreak Partners)
There’s been a lull in recent apartment groundbreakings. While various projects are under construction in Denver, most got out of the dirt years ago, when interest rates and construction costs were lower.Â
The Cap Hill site’s rectangular shape and the project’s design and lack of underground parking helped keep costs reasonable, he said. Costs are expected to increase by 1% to 3% if existing tariffs remain, but Elenowitz said he has a guaranteed maximum price contract with general contractor Arco/Murray that will prevent going drastically over budget.
“How we’re approaching it right now is weekly meeting[s], talking about every component that has a meaningful dollar value within the construction. What is the origin of the materials by nation? And are there alternatives that we might look at, either domestically or in countries that are less impacted?” Elenowitz said.
While most large buildings are financed by “institutional” funds, Elenowitz said, he sourced his cash from a network of high net worth investors. They’re less likely to sit on the sidelines like an investor into a bigger discretionary real estate fund might, he said.
The hope is that the timing will pay off. The project is expected to be completed in the back half of 2027, a time when few other apartments look likely to be coming online.
“If we’re building and opening up into an environment where people are delayed, it gives us greater resiliency,” Elenowitz said.
Councilman Chris Hinds spoke at Tuesday’s event. (Matt Geiger/BusinessDen)
The building — dubbed “Kaia,” Scandinavian for “pure” — will have 19 income-restricted units and 8,500 square feet of ground-floor retail. Half of that will be reserved for traditional storefronts and food and beverage operations, while the other half will be for “wellness” users such as acupuncturists, spas or even Reiki healers.Â
The building will also include a cold plunge, sauna, two-story rooftop lounge and an infinity pool.
At the ceremony, Denver City Councilman Chris Hinds, who represents the area, noted that Kaia was also the name of his first dog, who he rescued in 2002. He said she later rescued him after a crash while cycling that left him wheelchair bound.
“I rescued her in 2002, she returned the favor in 2008 and she rescued me,” he said. “And I see this project, among others, as a way to help Denver rescue unaffordability and create housing where we have so many people still on our streets.”
“I want to thank you so much for persevering with this market and providing additional housing and affordable housing for us in the city,” Councilman Hinds said to Elenowitz at the event.
