A newcomer developer to Denver is growing his stake in downtown’s office market after two major deals at huge discounts that will leave him with four skyscrapers and more than 5% of downtown’s office supply.

The Luzzatto Co. is buying the Denver Energy Center, the two towers located between Broadway and the start of 16th Street, for $5.25 million.

The deal is under contract after the company won 1625 and 1675 Broadway at an auction and the sale is expected to close in October, said Asher Luzzatto, president of the company.

It’s about a 97% discount from when it was last sold for $176 million in 2013. It foreclosed in 2022 and JPMorgan Chase took over the property as its owner.

It’s also the developer’s second major downtown deal since buying another two towers on 17th Street for $3.2 million. With both projects, Luzzatto is planning to convert a large portion of the tower’s office space for residential, retail and other uses.

“We had to get comfortable with that deal very quickly,” Luzzatto said about the auction for the Denver Energy Center.

The developer – a former L.A. mayoral candidate who lives in Taos, N.M. – said he approached his investors and pitched them about buying the property for ”round two.”

“Between the two, we think we can get 1,200 units or more, depending on how much office we keep,” Luzzatto said at a presentation at the Colorado Commercial Real Estate Symposium on Thursday. “But I think that these will be transformative. They’re not going to be cookie cutter in any sense of those words.”

The Luzzatto Co. plans to create 700 residential units in the towers for 633 and 621 17th St. in the project dubbed as “High Fidelity.” Concept art for the project shows how the company plans to upgrade the aesthetics of the building with more natural light and deep, natural colors. One idea is to take some of the old bank vaults in the building and transform them for food and beverage.

It could also include 50 hotel rooms.

Luzzatto hopes to activate the area and help Upper Downtown have more 24/7 energy with assets such as a bodega, bakery, daycare, art galleries, a coworking facility, a library, bars and restaurants.

The developer also said he plans to convert the Denver Energy Center into 500 residential units.

“​​Tower Two will be basically vacant by the end of ‘26 and so that’s the tower we’re going to focus on for the full conversion,” Luzzatto told The Denver Gazette. “Tower One, we’re still trying to figure out.”

Buying at the bottom?

City and downtown leaders have been champions of converting Denver’s office buildings into housing to turn the Central Business District into a “Central Neighborhood District.” The pandemic hit downtowns across the nation especially hard and Denver’s major 16th Street construction project – that’s set to be done by next month – exacerbated its problems.

But increasingly, city planners are considering encouraging the demolition of downtown’s aging skyscrapers as another viable — but less preferred — alternative.

Luzzatto’s ambitions could make a sizable dent in downtown’s empty office problem if fully realized.

Nearly 37% of downtown Denver’s office supply was empty in the second quarter of 2025, according to commercial real estate firm CBRE. That’s more than 11.5 million square feet of vacant office space – or the equivalent of six and a half Empower Fields.

CBRE’s report said downtown Denver is heading into a new phase of the cycle as most of the companies that sought to leave after the pandemic have left, yet the region still faces a long road ahead toward recovery. The market is now in a position of playing “musical chairs” with its supply, a broker said last month.

“​​I do firmly think that we’re at the bottom looking up, just from all the metrics that we’re looking at. Our firm is firmly vested in Denver in the recovery cycle,” said Billy Woodward, vice president at Denver-based Tributary Real Estate, during the panel conversation with Luzzatto and other large development project leaders.

Luzzatto said Denver’s distressed market can also be its advantage to pushing office conversions.

“Most cities are kind of stuck in a no man’s land right now … Denver is in a really great place, actually, because of the level of the stress to force the issue,” Luzzatto said.

Downtown Denver has a total of 31 million square feet of office real estate, according to CBRE.

The Luzzatto Co. will soon own up to 1.75 million square feet of downtown’s office real estate once the sale for the Denver Energy Center closes, bringing their stake up to 5.5% of downtown’s total inventory.

The four towers will give the developer the space of about one Empower Field to work with — though the company does plan to keep and renovate some of the office space in the first tower of Denver Energy Center.

Still a few roadblocks before making the projects a reality

In the tight macroeconomic environment, it’s difficult for developers to get the funding needed to convert aging office towers, where floor plans weren’t designed with housing in mind.

Residential buildings usually require more natural light and bathrooms on a floor, which may require more robust sewage and water systems – an expensive process.

And not to forget, with higher construction costs and interest rates, new construction projects are also struggling to get off the ground.

Luzzatto said he knows this kind of project is something that many other investors aren’t financially comfortable with yet – and that he’s taking a big risk.

“The first step really is just, do you have the courage to go into the unknown on cost and trust that if you build something great, it will work out?” Luzzatto asked. “That’s been my approach in business and the data won’t always show you the answer.”

The 17th Street buildings built in the 1950s and 1970s do have more suitable floor plans than other office towers, he said.

“That era is good,” Luzzatto said. “The floor plates are good, the window lines are good. They’re not too deep.”

If everything goes smoothly as planned, Luzzatto said he’s aiming to start construction next summer. But now the question is if it’ll go to plan.

The project at 17th Street is being stalled over securing an extension or another solution for one of the ground leases at 633 17th St. owned by Lakeside Park Co., the owners of the Lakeside Amusement Park, after the last owners had a disagreement about the rent they’re owed.

It’s holding back the $300 million project, Luzzatto said. Without a new lease negotiation, it’s hard to secure the capital needed for the project.

“We hope that they understand that their ground lease isn’t worth anything if these are zombie buildings,” Luzzatto said.

Lakeside Park Co. officials did not respond to a request for comment but Rhoda Krasner’s daughter Brenda Fishman, operator of the park, told Westword, “In regards to the ground lease at 633 17th St., our goal is to have the owners bring the lease current.”

Luzzatto is also working with city officials to get gap funding from the newly-expanded Downtown Development Authority, a tax-increment finance tool originally created to spur Union Station’s revitalization.

He said he’s asking for about $80,000 per unit for the High Fidelity project. For 700 units, that could total about $56 million.

The DDA gave the historic Symes Building $17 million to create 116 units of new housing and $14.5 million to the University Building to create 120 units of mixed-income housing, ranging between $120,000 and $150,000 per unit.

Those were two of the 10 projects in the first major wave of funding from the DDA, totaling $100 million out of $570 million available over the next decade. City officials have been cautious about spending most of the money upfront and want to leave enough for future projects.

But Luzzatto’s project fits the bill for the many of the things city officials have wanted to use the DDA money for: office tower conversions and new catalysts in Upper Downtown, specifically.

He might be asking for a lot of money, he said. But he believes it could spur downtown recovery faster and inspire more projects like it.

“Our argument is, look, it might seem like you’re putting a lot of eggs in one basket, but you’re actually getting by far the best return on investment of public money,” Luzzatto said.