Brooks Tower Summary for Real Estate Brokers
Brooks Tower was built in 1967. At 42 stories, it was originally envisioned as the first luxury high rise apartment building in Denver; in fact, it was the tallest building in Denver at the time of completion. The building has 566 residential units and 298 parking spaces. The HOA is self-managed by an on-site Property Manager Director and a team of around 22 employees.
In 1979 the ownership group started the process to make the building convertible to condominiums. Due to shifting market conditions during the 1980’s the building was not offered as condos until 1996. The condos sold out within 3 short years and were followed by the conversion of the 2nd floor commercial space into 22 unique loft-style homes in 1998.
The building remains a lower priced alternative to newer, high-priced buildings in the core Denver market and has an unbeatable location that factors into its desirability.
The building and units contain lead-based paint. It is not uncommon to have lead-based paint in buildings completed prior to 1978. Reports from tests performed during the conversion approval are available in the HOA office.
The building and units contain asbestos. Notably, asbestos is contained within the popcorn ceilings where they still exist, and it has been detected in the joint compound used in assembling the walls of the individual units. Asbestos has been abated to EPA standards and not considered friable in its current state. It is not uncommon to have asbestos in buildings completed prior to 1990. Reports from tests performed during the conversion approval are available in the HOA office.
There is a special assessment underway in the building. In 2018 the homeowners voted to replace the pipes in the building. These pipes comprise 3 major systems:
3.Hydronic (HVAC 2-pipe system)
The total projected repipe project cost is just under $30 million. This project started in early 2019 and will last 3 years. Each unit in the building (including each parking space) has an assigned percentage of ownership and these percentages guide the distribution of the cost of the project.
Owners were given a choice of paying their portion of the assessment in full at the start of the project or making monthly payments over a 20-year period amortized at 5.25% fixed rate. If an owner selected the monthly payments, they are added to the base monthly HOA. There are also options to pay lump sums either twice a year or when a property is transferred through sale.
When condos are offered for sale in the building, they should display the special assessment in the monthly payment. If the condo does not have the special assessment amount in the monthly payment, it has either been paid in full or it will be paid by the seller when a transaction closes. This will explain why some condos that appear approximately the same will display a payment that varies by a large amount.
Base HOA payments in Brooks Tower include heating, air conditioning, water, sewer, trash, recycling, cable service, maintenance on the building including roof and elevators, grounds and exterior building maintenance, common area maintenance including cleaning, access to all common area facilities (rooftop pool and bbq, fitness center, clubhouse, game room, conference room, lobby areas, laundry facility), insurance on the building, staffing for the full maintenance crew, personnel to service both the front desk and garage 24/7, office staff, and regular budgeted amounts that increase and maintain capital reserves for future replacement and upgrades. Reserves for the building are currently budgeted to meet the needs for the next 10-15 years as projected by an outside 3rd party reserve study completed in 2018; these projections are on target as of the last annual meeting held November 2019.
Market Values in Brooks Tower are projected to increase in the future. Naturally, with a large assessment in place and an extensive construction project in progress, values have trended lower over the past year.
As the repiping work reached full capacity during middle-to-late 2019, prices in many categories bottomed out as buyers and investors took advantage of willing and motivated sellers.
Conversely, in the larger view of the downtown Denver market, Brooks units are at the low end of the overall market and that is driving potential buyers’ interest in the building.
The supply/demand curve is also driving current prices. Most owners who would be potential sellers are choosing to not sell at the low point in the market. The current low inventory seems to be holding prices steady and is even causing modest increases in some product lines.