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CMA
April 26, 2019  

Developer Seeking Loan for Denver Project

Tessler Developments is looking for as much as $250 million of floating-rate debt to finance the construction of a large multi-family/hotel complex in Denver.

The New York investment firm is taking quotes for a loan with a five-year term. A portion of the financing could ultimately be structured as mezzanine debt or preferred equity. Carlton Group is advising Tessler on the financing.

The proceeds would be used to construct 411 residential condominiums, 119 rental apartments and a 93-room hotel at 2695 Alcott Street, where the Highland and Jefferson Park neighborhoods meet. The project’s cost and the proposed leverage couldn’t be learned.

The hotel portion would be built with apartment-style layouts and be leased to a hotel operator. The complex would have high-end amenities including two pools, a fitness center, a yoga studio, an outdoor grilling area and a clubhouse on an upper floor with a view of the Rocky Mountains. There would also be a 610-space garage.

The site is an empty lot that fills the block bounded by West 26th and 27th Avenues and Bryant and Alcott Streets. It’s near the intersection of Interstate 25 and Speer Boulevard, just across the South Platte River from the popular LoDo, or Lower Downtown, neighborhood.

Tessler purchased the property in 2015, paying nearly $18 million, according to local reports. The firm initially proposed a slightly larger complex and was preparing to start construction the following year. But the process was delayed and the plans were revised. Work is expected to get under way in earnest this summer and be completed around yearend 2021.

About six months ago, Tessler finished a residential project in the city: the 273-unit Atelier at University Park apartment complex, near the University of Denver. It features similar amenities.