Thursday, January 21, 2010, 2:53pm MST
100 Spire buyers expected to close in February
Denver Business Journal - by Paula Moore
Roughly 100 buyers who have made down payments on units at downtown Denver’s new Spire condo tower are expected to close on those purchases in February.
The Nichols Partnership Inc. of Denver, developer of the $175 million condo high-rise, is also in the process of renegotiating a $118 million construction loan for the project with the loan’s new owner.
Purchasers of Spire units will be able to move into their condos soon after sales close next month, according to Spire developer Randy Nichols. A specific date for when the closings will start hasn’t been set yet.
“We’ve got a lot of logistics to work out,” Nichols told the Denver Business Journal on Thursday. “We’ll have all these people moving in, so we’ve got to schedule elevators and moving companies.”
To date, Nichols has 130 contracts on Spire units.
“We’ve signed 30 contracts just since December, … which was shocking to me because of the holiday season,” the developer said. “You usually don’t move much in the way of housing at that time.”
Spire prices start in the low $200,000s and go up to $1 million-plus for premium units on higher floors.
Buyers who will occupy their units pay 5 percent down on units, and investors pay 10 percent.
The 496-unit, 42-story Spire is located at 14th and Champa streets, in downtown Denver’s theater district and near the Colorado Convention Center. Construction on the high-rise started in May 2007, and was completed in late 2009.
Construction was to be funded by a $160 million construction loan from Hypo Capital Real Estate Corp. of New York, but Hypo opted not to fund the loan in August 2007, so Nichols found multiple lenders to provide construction financing. Corus Bank NA provided a $118 million construction loan.
Last year, federal regulators took over Corus, which had been plagued by problem real estate loans. An investor group partly led by Starwood Capital Group LLC of Greenwich, Conn., bought a 40 percent stake in the lender’s loan portfolio, including the Spire loan, in the fall of 2009.
Starwood is currently renegotiating the 112 loans it purchased, including the Spire loan, according to Nichols.
“There are a lot of things involved in our discussion with Starwood,” Nichols said. “The main thing is we need to extend the loan. In the new world, it’s going to take longer to sell our units and operating costs [will be higher].”
Nichols discounts rumors that Starwood is pressuring him to convert Spire’s for-sale condos to for-rent apartments. “That’s not happening. … It doesn’t make sense,” Nichols said.
One thing that has helped the developer sell Spire units is the incentives offered to buyers.
For the project’s first marketing phase launched last year — which included lower-priced condos on floors 11-19 — Nichols Partnership offered a $35,000 credit that could be put toward purchase price or used to buy appliance upgrades, parking or extra storage. Roughly 90 of those units have been sold, meeting the threshold for buyers to qualify for Federal National Mortgage Association, or Fannie Mae, financing.
“We’re close to hitting the threshold for FHA [Federal Housing Administration] financing,” Nichols said.
For the newest marketing phase now under way, for more expensive units on floors 20-25, the developer is offering $40,000 to $80,000 off purchase price, depending on unit price.
pmoore@bizjournals.com
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