Last week, the owner of the European-styled Landmark high-rise condominium filed for bankruptcy.
The condominium portion of the Ritz Carlton in downtown Denver is in foreclosure.
High-rises in downtown Denver, such as One Lincoln Center, have struggled, as have troubled condominium high-rises in the Golden Triangle built by former Denver developer Craig Nassi.
“Quite frankly, I’m not sure Denver is a high-rise town,” said Tom Cryer, a broker with the Kentwood Co. Cryer noted that in the 1980s, the Waterford high-rise condominium project in Englewood suffered, and future phases of the tower were never completed. And some high-rise towers along Cheesman Park suffered from poor sales int he 1980s, he said.
Glut of high-rise condos?
Last week, I asked Mike Rinner of the Genesis Group if the metro area is facing a glut of high-rise condos, especially in light of the 42-story, 496-unit Spire poised to open in downtown Denver.
“A glut? That’s an interesting way to phrase the question. I’m not sure I would phrase it that way,” Rinner said. “Obviously, there is an over-supply for the demand out there. The supply exceeds the demand, which is a classic definition of an over-supply.”
Rinner said he does not think another high-rise residential project will be built in the Denver area after the Spire.
“I don’t see another one coming on after the Spire,” he said. Even if a developer was brave, or foolish enough, to tackle one, it’s unlikely he could get construction financing in this environment.
Denver not a high-rise market
Chris Mygatt, president of Coldwell Banker Colorado, said that Denver does not have the history of high-rise living, like other cities in the country.
“Clearly, it is not a deep is not a deep market for us,” Mygatt said. “It’s allure is that it is fun and it is exciting. It also appeals to a fairly narrow band.”
Mygatt said that one reason is that we are not constrained by land, such as a New York or San Francisco.
“One of the problems (for high-rises) is that we have too much land here,” Mygatt said. “In Manhattan, you are used to and learn to live vertically. But we’re not a Chicago, Manhattan, or Miami, Fla.” And even those areas are struggling because of over-building and lack of demand and financing. Mygatt was recently in Florida and saw a high-rise condo project that was only 20 percent sold. “How do you keep the doors open at those levels?” he wondered.
Interesting enough, Rike (pronounced Rick) Palese, the listing agent for the Lanmark, does not necessarily disagree with these assessments.
“It is definitely a small percentage of the market,” in the Denver area,” Palese, of RE/MAX Professionals/Classic New Homes, told me last week. “We are not a New York, San Francisco, Atlanta, or Chicago. ”
High-rises spread out
Still, the saving grace is that the high-rises are geographically spread out, he said. There are only a handful of high-rises along the southeast corridor, with others in the central business district and in the Golden Triangle. And the Pinnacle, as the only high-rise along City Park, has been bucking the trend, with strong sales.
Despite the bankruptcy, and the small market for high-rise living, Palese believes there are “enough people who wnat the “lock and leave lifestyle,” to make the Landmark a success.
Most of the buyers, as expected, have been coming from large single-family homes in Greenwood Village and Cherry Hills. A few have also come from big homes to the south, such as Castle Pines Village, he said.
“We’ve also had some buyers from other condos in Cherry Creek North and LoDo,” Palese said. “There are people who may have already sold their big, suburban single-family homes to move downtown or Cherry Creek North. They like condo living, but now they want to live some place that is a little less congested and noisy.”
Contact John REbchook at JRCHOOK@gmail.com or 303-945-6865.