Denver Post.com - Legacy Plaza gets under way on spec -
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Published on: 10/19/2001
Last Visited: 10/19/2001
Peter Llorente , regional vice president of Legacy Partners , stands Thursday at the construction site of the 10-story Legacy Plaza office building at 15th and Wewatta streets in downtown Denver.The company broke ground this week on the $65 million project.
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Peter Llorente , Legacy's regional vice president in Denver , acknowledged that some real estate experts were skeptical that the company would break ground.
On the other hand , some brokers said Legacy's timing could be good.As the first company to come out of the ground with a building , Legacy would be the first company in position to take advantage of a stronger market.
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Llorente said Legacy is counting on an improving economy to lure tenants to its building.
We are expecting the economy to start picking up in the first and second quarter of next year , Llorente said.Real estate lags behind the general economy by nine to 12 months , so we are looking at the commercial real estate markets rebounding in the first part of 2003..
The risk is higher on this project than on other proposed downtown buildings because Legacy is starting construction before it signs a tenant to occupy the space.
Other developers say they will start construction only after leasing at least one-third of their proposed projects.
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Llorente said he expects downtown Denver , like several other downtowns across the country , to weather the stormy economy.
The vacancy rate in downtown office buildings is 7 percent , much lower than the overall vacancy rate throughout the Denver area , according to CoStar Group , a real estate data service.
That level of vacancy also doesn't count the amount of space available for sublease in downtown , which pushes the total above 10 percent.
The office market in Lower Downtown is stronger than the market in the rest of downtown.
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Vacancy is consolidating in the area east of Stout Street moving toward Broadway , Llorente said.
In LoDo , about 600 , 000 square feet of office space is vacant.That's about 2.6 percent of the space in that market , according to Frederick Ross Co. research cited by Llorente.In the rest of downtown , 1.5 million square feet , or 6.5 percent , of space is vacant.
In addition , the newest buildings constructed in the downtown office market have been filled quickly.
Continuum Partners' 16 Market Street project had filled nearly all of the 180 , 000 square feet of office space when it opened this year.
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Llorente said Legacy's asking rent is $24 per square foot , not including such expenses.
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