Movement on 14th Street

Today's Post reports that local developer Charlie Wooley and Wally Hultin have sold the 25,000-sq.-ft. parcel at 1417 Stout where they had planned to build a condo tower for seniors. The buyer is Bhaman Shafa of Focus Property Group, which has five other investment opportunities listed on its website. The Post's lead real estate reporter, Margaret Jackson, points out that Focus also is pitching two sites at 14th and California (a cash generating surface lot) and another at 14th and Stout, for which Shafa paid $4.3 million and is eager to develop.

Jackson writes that both Wooley and Hultin, of Byers Street Properties, plan to direct the $7 million sale of the 1417 Stout sale into "smaller infill projects. Wooley's St. Charles Town Company is currently converting 10 landmark residential buildings at Lowry, St. Charles's first foray outside of central Denver. Wooley pulled off a coup of sorts with the redevelopment of the Lowenstein Theater by luring the Tattered Cover and Twist & Shout to Lowenstein. These two independently owned businesses are institutions in Denver and have created further momentum along East Colfax, thanks in part to the creation of three Main Street zone districts along Colfax. Over the past several years, Hultin's Byers Street Properties developed infill residential developments: Downing Street Station along the D-Line right rail in Curtis Park, the Lofts at Berkeley Park and Tennyson Parkside, both in northwest Denver.

14th Street has been dubbed a cultural corridor, as envisioned, for example, by the 14th Street Initiative, and the Post article ends with mention of other future residential projects:

• Developers Michael Brenneman and Jeff Selby recently closed on $200 million in financing and plan to start construction on the Four Seasons hotel and condo project at 14th between Arapahoe and Lawrence streets by midyear.

• Randy Nichols is expected to break ground this spring on Spire, his 41-story condo project near the Colorado Convention Center.

• Buzz Geller is in the final approval stages for the condo tower he wants to build at 14th and Speer Boulevard. If the Denver City Council approves his project at its Feb. 20 meeting, he said, he expects to break ground on the site within a year.

• Toronto developer Great Gulf Group is planning a 51-story condo tower at 14th and Lawrence streets. Great Gulf expects to start construction on the sales center in March.

In an atmosphere of uncertainty surrounding the prospects for future condo project in Denver, The Four Seasons project is a safe bet, but the other projects have been "on hold" for several months. We'll have to wait and see if the stars and in alignment later this year for groundbreaking and construction.
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On the employment front, The Rocky reports today that McData will lay off 270 by this summer - 128 in Broomfield, 73 in Westminster and 69 in Louisville. The company was acquired by Brocade Communication Systems for $973 million in August 2006. At acquisition, 570 of 1,470 of McDatas employees were located in Colorado.

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The Greeley Tribune reports on The Group Inc.'s forecast for 10,791 home sales for 2007, slightly higher than 2005, which it made public at the brokerage firm's annual market forecast. But wait: The Group's prediction for 2006 overestimated home sales in northern Colorado by about 10 percent. Indeed, no evidence is cited by the Tribune or a similar article in the Coloradoan, and it is fair to question whether a commission-driven brokerage business will present housing data impartially.

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While we're still in northern Colorado: a Post columnist does a casting call for those interested in appearing on HGTV's "My First House Program" (Ahem, the show's actually called "My First Place"). If the show is to appear in Colorado, Berthoud real estate broker Lou Grassner must produce a camera-ready buyer within a week.

Name the city (a) that (most) loves mass transit and (b) the city that never walks

Answers: (a) Portland; (b) New York City

An article and an op-ed piece clash in today's NYT: NY, is chided for becoming a "city that never walks" while Portland goes airborned (re: gondola) with mass transit. The latter is the $57 million Portland Aerial Tram, which plugs along at 22 mph from the Willamette River up to the campus of the Oregon Health and Science University. The opinion piece, written by Robert Sullivan, takes NYC to task for going after aggressive...cyclers and calls the great city a victim of its own success with families who have moved back into the City and brought their suburban way of life in tow (perhaps an SUV). It says that New Yorkers always find an excuse NOT to ride public transportation. The solution is introduced in the form of getting the cars out of the city and expanding public open spaces. It then cites a number of U.S. cities - Denver included - that have light rail and asks why NYC can't add light rail to 42nd Street. It also brings back the ghost of Robert Moses, who built huge real estate projects and sliced through existing neighborhoods with highways and byways like the Cross Bronx Expressway. An architecture article in last week's NYT casts a more sympathetic glance at Moses with 20/20 hindsight. The article ends by looking at the broader sweep of 20th century America

The subtitle of Mr. Caro’s book is “Robert Moses and the Fall of New York.” But ultimately, the exhibitions’ organizers say, they felt it was important to judge Moses’ impact on New York in the context of what happened across the nation during his tenure, like middle-class flight from cities and the construction of highways that spurred the rise of suburbs.

Like many icons from our history, Moses had to break a few eggs to make an omelette, and his impact - good or bad - on one of the world's greatest city's is not in question.

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On 1.25.07, the WSJ posted an interactive survey of 28 major metro housing markets. Here's how Denver fared:

• MLS listings down 4% at year end 2006 from a year earlier (the 27 other metro areas were up!)
  
• Recent price trending lower from the previous month [Banc of America Securities]
• An "average" employment outlook [job growth projections from Moody's Economy.com for 2 years ending 12.31.08]
  
• 3.1% of loan payments are overdue [US average of 2.51% based on data from Equifax and Moody's Economy.com]
  
• The entry pictures a three-bed, three bath home in northeast Denver that has been listed since Jan. 4 and is priced at $254,900.
  

While the indicators among these 28 metro areas varies greatly, the conditions within each metro area, at least in the case of Denver, are somewhat divergent. None of the 28 showed an upward trend in prices, while employment outlooks ran the gamut. While it's worthwhile to examine national trends through individual metropolitan markets, there are not necessarily clear signals for those in Denver who are trying to gauge whether or not to go forward with a residential development.

The Journal embeds this survey in a story entitled "Housing Glut Gives Buyers Upper Hand" and points out that buyer traffic appears to be picking up as homebuilders dangle incentives and as interest rates remain historically low.

On the same day (page A2), a story appeared reporting that 2006 saw the largest annual decline in national sales of existing homes since 1989. The latest annually adjusted figure, according to NAR, is 6.22 million homes. Still, the 2006 total was the third highest since NAR began tracking existing home sales in 1968, and prices went up slightly at the national level. In the month of December, the West registered the largest regional decline, off 15.5% in a year-over-year comparison. The article cites differing opinions from economists on whether we have seen the worst or not. The CEO of D.R. Horton thinks we'll reach the bottom in mid-2007 but will not see a vigorous recovery thereafter.

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The Housing Bubble blogger cites the RMN article on Commonwealth Heights at RidgeGate, followed by an article from Billings, Mont. Whether it's south suburban Denver or downtown Billings, these projects are precedent-setting, at least to some extent, and have to convince enough consumers to buy into to the urban mystique. After all, pay $400,000 to live in dowtown Billings? Many still aren't buying it, and many of these new ideas will just have to sink or swim.

"Top of Shop" Housing

The Boston Globe reports on the resurgence of what was once a common phenomenon in New England: housing above commercial and retail. Many smaller communities with ailing downtowns are looking to housing above underutilized structures in town centers. A real estate developer in New Bedford: "If you want safety and life in a downtown, then the best strategy is to keep the lights on at night."

Next we go West to Durango, Colo., where a new comprehensive plan pushes multi-modal transportation and LEED-certified buildings, as reported by the Durango Herald.

The Front Range may sometimes look askance at our neighbors on the Western Slope, but the Denver Post reported this week that mountain and Western Slope counties are experiencing double-digit annual appreciation in median home values. Meanwhile, some counties like Adams have been in the red.

John Rebchook writes about Commonwealth Heights in the West Village of RidgeGate and its planner/developer, Keith Simon, vice president of RidgeGate Community Development and director of Coventry Development Corp. I've always wondered why they didn't build this type of Main Street development -- or at least some small-scale retail to complement the SuperTarget -- relatively earlier. The longtime owner of the property is a reclusive shipping family from Greece, as described in a 2005 article published in High Country News, a Paonia, Colo.-based semimonthly publication covering green issues in the West. The article strikes a hopeful, yet tempered tone about New Urbanism and transit-oriented development in Denver Metro, pointing out that light rail won't extend to RidgeGate for another decade and that the property's Greek ownership is envisioning buildout in 2060.

A Walkable Atlanta?

On 1.10.07, the WSJ described the recent burst of mixed-use developments in a city whose metropolitan area fares among the worst in the nation for traffic and sprawl. Citing long-term trends in which empty nesters and young professionals are increasingly moving "in" to the city. Towards the end of the article, the author flatly states: "Overbuilding is a risk." Atlanta can at least take solace in population growth of two million new residents in the next 25 years.

Work and Let Live?

This is taking mixed use development in a differnt direction: The Seattle Times discusses the insertion of condos and apartments within office buildings. In a number of cities, hotels and condos have blended well, as have condos over ground floor retail, work/live and or small businesses, but putting office and residential under one roof - without clear boundaries - is problematic, according to a commercial real estate broker:

"If you're an office guy, you don't want to be riding up an elevator with some sweaty person who just worked out."

Dillon's Town Center

Leland Consulting Group recently issued a report commissioned for Dillon's Town Center, a somewhat forgotten stopoff along Highway 6 leading from I-70 to the Keystone and A-Basin. Tourism-dependent communties such as these in Summit County face a number of challenges in making a town center both viable and sustainable, but perhaps the County's proximity to the Front Range, and its ability to push summer recreational activities, e.g., mountain biking, will make these local economies less seasonal, easing the strain on businesses and residents and diversifying their economies. Regardless, this ski season is shaping up to be a record breaker.

Retirement center doubling (DPo)

The Denver Post reports on the doubling in size of the Holly Creek Retirement Community in Cenennial. The name of the game in senior housing - er, active adult communties - is "independence" with tiered levels of services that aren't, well, terminal. A demographic tidbit:

As baby boomers age, the state's population age 65 and older will more than double from more than 400,000 in 2000 to more than 1 million by 2030, said Larry Armstrong, president of 50 Plus Marketing, a Denver-based consulting group that works with builders and retirement communities to identify active adult markets.

Colorado back on top of foreclosures (Denver Business Journal)

The DBJ reports that Colorado has regained the dubious foreclosure crown ahead of former #1 Nevada. Colorado has one foreclosure filing for every 376 households, and Greeley tops 200 metropolitan areas with a rate of one filing for every 169 households - six times the national average. It's interesting to note that the runner-ups to Greeley were Ft. Worth (1/242) and Detroit (1/250), hardly hotbeds of real estate activity or bubble markets. One wonders about the casuses of the highest foreclosure rates. Greeley, in Weld County, has attracted an influx of residents - many commuting into to Denver, about 65 miles to the south - due to its relatively inexpensive housing relative to the Denver metropolitan area as a whole. Perhaps a greater degree of subprime lending is at play here in conjunction with lower household income levels, suggesting that these particular households have little margin for error when facing the changing terms of an ARM or other non-fixed mortgage instrument, to say nothing of difficulty in selling existing homes.

Data point to uncertainty in US housing (FT)

The Financial Times reports today from Washington that bond markets are welcoming good news about services, jobs and exports.

The article then shifts to a raft of indices from the housing market: mortgages applications are up; the investor share of the [new] housing market remains high [?] at 10%; warm weather (at least in the East) has offset seasonally slower traffic; home starts are still contributing to the national level of 6.3 months of inventory (though permits have slowed down, a longer-term indication compared to starts); and rising delinquency on subprime loans.

Finally, if bond markets perceive the Fed to be less likely to make a rate cut, bond yields and mortgage rates could bump up, according to the article.

Light Rail Woes

After T-REX and the Southeast Line Rail finished on schedule last year, future implementation appears much more murky, according to the Rocky and the Post. Other cities have had plenty of trouble: construction delays and change orders plagued the five-year rollout of the Third Street light rail line in San Francisco.

Housing Slowdown Not Slowing Consumer Spending

Against the backdrop of a 0.1 percent rise in industrial production and a 1.8-percent drop in housing starts forecast for the month of December, Bloomberg highlights the dichotomy between strong retail sales - most recently the two strongest months in a year - and sluggish real estate and manufacturing sectors.