Shea Properties to Convert Denver Office Building Into Homes

Shea Properties has received more than $4 million in a federal tax credit to convert offices to affordable homes in southeast Denver.

The Aliso Viejo, Calif.-based developer secured the public tax break to turn a four-story office building into 143 affordable homes at 4340 South Monaco Street, in upscale Southmoor Park, BusinessDen reported.

The project could be the first office-to-home conversion in greater Denver since the pandemic. It’s also Shea’s first office-to-residential conversion.

The credit follows $29 million in bonds issued by the Denver City Council last month toward converting the 124,000-square-foot office building near the Denver Tech Center.

The project was among 10 affordable housing developments in Colorado to secure tax credits from the Colorado Housing and Finance Authority — likely because of the office-to-home conversion, a Shea executive said.

“Everyone talks about that, but we’re the first to do it,” Peter Culshaw, executive vice president for Shea, based in Denver, told BusinessDen. “They (CHFA) have a very thoughtful criteria for selection, it’s not one thing. … We tried to check as many of the boxes for them as possible.

“There’s very few affordable projects in that immediate area … and they’re all full.”

Shea bought the 13-acre property this spring for an undisclosed price from Phoenix-based Orion Office REIT. In August, the city approved a zone change allowing the developer to convert the vacant building.

Culshaw said Shea hopes to close on the purchase of the property by March, assuming he gets a building permit next month, according to BusinessDen. He expects to complete the conversion in 2026.

The trapezoid-shaped building, built in 2001 west of the 25 Freeway, has been vacant for at least five years. It was once occupied by Atlanta-based Invesco, an investment firm.

Plans call for converting the white building with teal floor-to-ceiling windows into 143 affordable apartments set aside for households earning between 30 and 70 percent of the area median income.

The converted offices would contain 23 studios, 89 one-bedroom, three three-bedroom and three four-bedroom apartments, served by a game room, fitness center, laundry and storage. The building parking lot and landscaping would be left alone.

Shea secured $6 million for the project from private activity bonds allocated by Denver’s Department of Housing Stability.

Southmoor Park, 10 miles southeast of Downtown, is Denver’s priciest neighborhood, with a typical home price last year of $2.1 million, according to 5280.com, a Denver magazine.

Shea, which has an office in Denver, is also working to redevelop the former Marina Square shopping center at East Belleview Avenue and Ulster Street. Culshaw oversees a Colorado portfolio that includes 2 million square feet of commercial space and 750 apartment units.

Shea Properties, whose roots stretch back to 1881 in Portland, Oregon, owns 11,000 apartment units and 6 million square feet of office, industrial and retail space in California, Colorado and Washington, according to its website.

— Dana Bartholomew