Denver’s hottest office market has another new building on the way, although groundbreaking came later than expected.
Denver-based BMC Investments, led by CEO Matt Joblon, is breaking ground on a seven-story, 94,000-square-foot office building on a 0.43-acre site at 242 Milwaukee St. in Denver’s Cherry Creek neighborhood.
Brue Baukol Capital Partners is a partner in the deal.
The building will have 10,000 square feet of retail space anchored by a showroom for TileBar, according to BMC. The tile and bath brand currently has three showrooms between New York and Washington, D.C., per its website.
Back in 2022, when he submitted plans for the building, Joblon hoped to have it done by the end of last year.
“It took us longer than we hoped to see enough leases in place to make us feel comfortable,” he told BusinessDen Wednesday.
Cherry Creek is a bright spot in an otherwise moribund office sector locally. The submarket was 13.4% vacant at the end of the second quarter counting sublease space, according to CBRE. That compares to 36.8% in downtown Denver and 27.8% in the metro area.
Joblon, who is Cherry Creek’s most prolific developer, said Milwaukee Place is about 65% leased — lower than usual for his groundbreakings.
“The three other buildings we built we were able to 100% pre-lease them much faster than it took us to get to 65% here,” he said.
Joblon doesn’t necessarily see it as a sign of demand in Cherry Creek softening. Things have picked up in recent weeks with the news that construction would be starting, he said, and he now has more letters of intent for space than actual remaining space.
“There was so much uncertainty on a macro level … but now it seems people are re-engaged in a much more energetic and aggressive manner,” he said.
One company not in the mix for Milwaukee Place? Palantir.
The public company plans to move its headquarters to the Financial House building at 205 Detroit St. in Cherry Creek. But that’s temporary, according to MarketOnce CEO David McGrath, who subleased the space to Palantir.
McGrath told BusinessDen in September that Palantir “needed some short-term space while they await the completion of one of the new offices in Cherry Creek.” He expects to get the space back in two years.
Joblon, however, said Palantir has not leased space at Milwaukee Place and isn’t in talks to do so.
“There’s no conversations with them,” he said.
Milwaukee Place will be identical in form and mass to 255 Fillmore St., another office building that BMC completed one block west. But it will have a different facade.
BMC bought a portion of the Milwaukee Place development site in 2017 for $6.3 million, records show. Joblon completed the assemblage in 2022, convincing John Sheridan of Sheridan Ventures to contribute a parcel in exchange for a stake in the development.
Completion is expected in January 2027.
Haselden Construction is the general contractor on Milwaukee Place, which was designed by 4240 Architecture. FirstBank, led by Michael Kosakowski and Patrick Riley, provided a $53.6 million loan, records show. Justin Nelson of Walker & Dunlop was the debt broker.
Newmark brokers Jamie Gard, Pete Staab and Tom Lee are marketing the office space. Sam Zaitz of JLL and Julie McBrearty of SullivanHayes are handling retail leasing.
Joblon’s groundbreaking means there are now three office buildings under construction in Cherry Creek.
At 201 Fillmore St., Seattle-based Schnitzer West is constructing a 140,000-square-foot building that will become the headquarters of Antero Resources. And at the corner of Second Avenue and Adams Street, Denver-based Magnetic Capital is erecting a 100,000-square-foot building that will count Bow River Capital among its tenants.
Those two buildings are expected to wrap early next year.
In a sign of BMC’s prolificacy, Milwaukee Place isn’t the company’s only project under construction in the 200 block of Milwaukee. On the other side of the street, the firm is putting up an apartment building, where the furniture brand Arhaus will take retail space.
BMC is also redeveloping a portion of the Clayton Lane project. That has involved demolishing buildings along First Avenue once home by Sears and Crate & Barrel.
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