Dollars & Sense

Bouncing back from the Great Recession.

Definitely, Maybe

by Luc Hatlestad

After a few down years, a prominent Cherry Creek developer sees rays of hope in 2011.

When Western Development Group unveiled its NorthCreek complex in 2008, it epitomized high-end, mixed-use new urbanism. Then came the recession. As 2011 dawns, the Cherry Creek North outpost has sold most of its tower residences (which primarily range from the low $1 millions to high $4 millions) but still hasn’t sold any of its super-swanky flats or brownstones (low $2 millions to middle $3 millions). Even so, WDG partner David Steel sees reasons to be “cautiously optimistic” in the coming year.

What have you been working on lately? We’ve gotten some action in properties that have been on hold for future development, which is very encouraging. Retailers have been moving into Cherry Creek North or moving within the neighborhood to improve their location or better their rent.

Have you been able to refill the vacant spaces? Some of them. We own a half-block on the east side of Columbine Street between Second and Third avenues. The rents are cheaper there because when we redevelop the site—about two years from now—we want everyone to leave at the same time. We’re going to do another mixed-use project there, but we’d like to sell more units at NorthCreek before we start, because we don’t want to be competing against ourselves.

Are you buying other properties in the area? We’ve discussed sales with other owners around the neighborhood, but a lot of them still think their properties are as valuable as they were in 2006 or 2007. That’s not the reality today, but we’ll continue to talk because we think that long-term, Cherry Creek North is a very good place to be.

So what’s your outlook for 2011? We’ve been looking around the Front Range—particularly in Boulder—and have been steering clear of the mountain properties; we’re open to a lot of different things. I think we’ll see a modest upturn. We’re always the half-full kind of guys.