Real estate investors are making strategic purchases in Denver's Burnham Yard, placing bets on the area's future transformation long before the Denver Broncos are expected to build their new stadium. This activity is driving up property values in the industrial neighborhood, even as the formal rezoning process has yet to begin.
The Broncos have identified the railyard as their preferred location for a new home, tentatively scheduled for 2031. The team recently submitted a preliminary development application to the city, outlining a vision for a stadium surrounded by a mixed-use district featuring housing, offices, and restaurants.
Key Takeaways
- Real estate investors are acquiring industrial properties near Denver's Burnham Yard, the proposed site for a new Broncos stadium.
- A recent off-market sale of a warehouse reached $5.4 million, or approximately $125 per land square foot, a price considered high for the current industrial zoning.
- The Broncos' development plan depends on significant rezoning of the area, a process that is still in its earliest stages.
- Experts note that while speculation is high, large-scale development may be delayed by current challenges in Denver's multi-family housing market.
Early Bets on a Future Hotspot
The announcement of the Broncos' interest has ignited the local property market. Commercial real estate investor Jake Malman, whose firm purchased an industrial building near the site in May, acknowledged the strategy. "Our plan here was to buy this building, hope for some good news with the Broncos, which we got, and exit the building and sell it to someone else for a premium," he said.
This sentiment appears to be spreading. Malman's firm recently brokered an off-market deal for a warehouse at 901–999 Vallejo Street, which sold for $5.4 million. The property, home to Prism Workspaces and nearly 100 local artists, was not actively for sale when investors approached the owner, signaling aggressive interest in the area.
This early activity highlights a clear trend: investors are positioning themselves to capitalize on the anticipated revitalization that a major sports and entertainment complex can bring.
The Hurdles of Rezoning and Development
While optimism is growing, significant challenges remain. The entire Burnham Yard area is currently zoned for light and heavy industrial use. For the Broncos' vision of a mixed-use district to become a reality, a comprehensive rezoning effort is required.
A Familiar Transformation
Experts compare the potential redevelopment of Burnham Yard to the transformation of other Denver neighborhoods like the Central Platte Valley and River North (RiNo). Thirty years ago, these areas were also dominated by rail yards and industrial buildings before master planning and rezoning paved the way for the vibrant residential and commercial districts they are today.
Jeff Peshut, an assistant professor of finance and real estate director at Metropolitan State University of Denver, emphasized that the value of recent transactions is entirely dependent on these future changes. "The $5.4 million for an acre of land, roughly an acre of land, is about $125 per land square foot, which is very high," Peshut noted. "It always depends on the zoning. What you can use it for. How densely you can use it."
The Broncos' ownership group, Walton Penner Family Ownership, is not expected to finalize its purchase of the Burnham Yard property until all necessary entitlements and zoning approvals are secured. This makes early investments by others a calculated risk.
Market Realities and Long-Term Vision
The timing of any new residential construction faces headwinds from the broader Denver housing market. In 2024, the city saw the delivery of 20,000 new apartment units, pushing vacancy rates to a 15-year high. This oversupply could temper the pace of development.
"We're likely not going to see any significant interest in new development through 2026 and maybe through 2027," Peshut projected, suggesting a patient approach is necessary.
Despite this, real estate professionals are actively engaging with current property owners. Chase Grimes, an industrial real estate broker with Pinnacle Real Estate Advisers, has been contacting landowners to discuss the future. "On the very surface level right now, I'm just trying to meet people, kind of hear them out, and understand their real estate needs," Grimes said.
He added that the response has been largely positive, with many viewing the situation through an "opportunistic lens."
Public Investment Boosts Confidence
The project received a significant vote of confidence from Denver residents, who recently approved the Vibrant Denver Bond measure. The bond allocates nearly $140 million to rebuild two crucial bridges in the Burnham Yard area, a key infrastructure upgrade that will support future development.
A Calculated Waiting Game
For investors like Malman, the strategy involves holding onto properties while the city's processes unfold. He plans to retain his building for at least a year and a day to avoid higher short-term capital gains taxes, a common tactic in speculative real estate.
The submission of the Broncos' preliminary plans to the city has brought more attention to the neighborhood. "I think a lot of people that may not have known or been on the early side of things now know, and we're starting to see a lot more activity in the neighborhood," Malman observed.
The consensus among market watchers is that any property on the periphery of such a large-scale project stands to benefit. As the city reviews the Broncos' proposal and the path to rezoning becomes clearer, the speculative buzz around Burnham Yard is only expected to grow louder.
