Denver Direct: The Pinnacle

Wednesday, April 2, 2008

The Pinnacle

The Pinnacle at City Park (Vertical panorama composed of two photos)

Walking around City Park in Denver as I have for the last 37 years, I can’t help but admire The Pinnacle, the first of the high-rise buildings to be built on the edge of my favorite park.

I am so damn old that I remember the wrecking ball smashing down mansions around Cheeseman Park as that high-rise community got started. There was no Historic Denver, and they didn’t even remove the woodwork and hardware from the building first. Of course that was so far back that you could buy a 4000 sq ft mini-mansion for $30,000. No one seemed to want these old buildings – too big for a single family, too costly to convert to apartments (condos hadn’t been invented yet). Denver’s population was diminishing as the flight to the suburbs continued. Urban Renewal was razing downtown, and Dana Crawford was just getting started.

Coming from the east coast, I was amazed at the low value Denver put on its history. I tried to organize a limited partnership to buy up some of these Victorian gems, but the regulations were onerous and the (east coast) interest in the idea was slim. I was a little ahead of my time, as usual.

Studying the situation around City Park, I soon discovered Denver’s silly secret – The View Planes. These ordinances are, to me, a prime example of “illegal taking”. Thousands of property owners are stripped of the potential value of their property as these height restrictions predetermine what can and can’t be built. But don’t get me started on these antiquated limitations. I’ll save that rant for another day.

The old Mercy Hospital site sat empty for years. When would the high-rise movement around City Park get started? Who could have imaged it would take until 2005.

But now the first tower of the Pinnacle rises from its town-house base. To my way of thinking it looks great – a prime example of City infill for the Poundstone-landlocked Denver. When you can’t build out, up is the only way to increase the tax base. Density is good.

But in today’s uncertain real estate market, what does the future hold for Denver? The “bubble” has burst, but Denver’s overbought speculative mania has not been that great. I read that we may have a 10% drop in price but nothing like the 35 – 50% experienced on the coasts.

(Click to enlarge)

Aside: I have a wave theory of real estate for the U.S. It acts like a giant slow-motion wave machine. When the coasts are up, the center is down, and vice-versa. It has happened twice in my life-time and it takes about 20 years per cycle.

But, I digress. Tower One of the Pinnacle is finished, and is said to be fully occupied. Looking closely at the balconies, I began to wonder if that were true. From The Pinnacle

The first tower, boasting 27 stories, will have 144 units with one, two and three bedroom floor plans available and unit square footage ranging from 940 square feet to 2,269 square feet.

A quick trip to revealed 42 units in Tower One for sale at this time. Almost a third of the units are for sale. Speculators failing to sell in time? People wanting to move? I have no way to tell, but I wonder what the effect is on the current sales of Tower Two units.

Any readers live at The Pinnacle?