Posted Jan 24, 2008, 3:52 PM
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Join Date: May 2004
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Looks like this Denver project is still alive...
Spire work starts again
Construction resumes on the 41-story project after the developer acquires new financing.
By Margaret Jackson
The Denver Post
Article Last Updated: 01/23/2008 11:30:01 PM MST
Nichols had to halt work on the project at 14th and Champa streets after the New York lender that originally agreed to finance the project pulled out.
"We're back amongst the living," Nichols said Wednesday.
Real-estate brokers cheered news that the stalled project is back on track, but one expert cautioned that the new deal with a different lender is not necessarily a sign that credit markets are suddenly loosening up.
"In general, credit is still very tight," said Ed Boxer, principal of Essex Financial Group. "Lenders are all still very, very cautious about leverage and overlending on property."
Condominium projects are more difficult to finance than other projects, he said.
"Lenders like office in Denver right now," Boxer said. "Condos across the nation are very hard to finance."
The new senior construction loan for the Spire was provided by Corus Bank, which specializes in condominium, hotel, office and apartment loans. Colonnade Properties and Madison Capital Co. provided mezzanine debt, and Fisher Capital provided subordinate debt.
Nichols had to increase the equity in the project to secure the loan.
"We were fortunate to have an equity investor who was in the project before who increased their contribution significantly," Nichols said.
The $175 million tower, designed by RNL Design, will include 503 condos with prices starting at $200,000. There also will be 7,633 square feet of street-level retail space.
Dee Chirafisi of Kentwood City Properties said the market is picking up, so Nichols' timing may be better now than when he started. The number of showings is about twice what it was in November and December.
"The price point is fabulous," she said. "There's nobody else really doing that price point right downtown. Glass House (in Riverfront Park) was a perfect example of a lower price point that just got swept up very quickly."
Units in the Spire are not available for presale, which has frustrated some real-estate brokers.
"I've got a buyer who's willing to buy one of the penthouses, and they won't sell it to them," said Dan Fead, a broker with Fuller Towne & Country. "But I think it's a good project, and I really like the price point."
Nichols said he will continue to pursue a lawsuit against the original lender, Hypo Real Estate Capital Corp., which failed to fund the project after JE Dunn Construction started building it. He does not yet have an estimate for how much the delay has cost him.
"A lot of expenses came through as late as today that we would add to our list of damages," Nichols said. "We've closed this loan twice, so we've paid twice the attorneys' fees. We had to finance under a much more difficult financing market. We still had to pay for the crane and concrete forms while it was suspended."
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