By Larry Hotz, All Denver Real Estate, Senior Editor
What is arguably one of the most luxurious and best condominium project in the metropolitan area has suffered a “cash flow” problem according to an email I received from the developer today. Everest Development Company has filed for protection under Chapter 11 bankruptcy laws. The project will continue to be sold from the on-site sales office and the developer is promising not to allow homeowner association fees to escalate.
The ultra-luxury Landmark Condominiums were introduced to the Greenwood Village real estate market more than two years ago with pomp and circumstance. I remember being at the introductory luncheon that was a gala affair complete with acrobatic acts from Cirque du Soleil. No expense was spared at the many parties that followed to introduce brokers and buyers into a higher level of condominium living that has ever been offered in this market before.
The units themselves are lavishly appointed with standard features including gourmet kitchens with slab granite high-end cabinets and upgraded finishes. The two towers offer valet parking, a 24-hour concierge and even individual wine storage for each unit. The towers were the anchor for the hundred and eighty thousand square foot shopping center just outside the front door of the condominiums. There are shops, restaurants and even a high end, multiscreen the movie theater. The popular Comedy Club is located there.
A statement issued by the developer said in part; “We regret that certain challenges, including financing issues with the project’s senior lender, Hypo Real Estate Capital Corp., combined with the local and national slowdown of residential home sales, and the inability of our buyers to sell their existing homes and obtain financing for their new homes here at Landmark, have unfortunately impacted our cash flow and made reorganization our only option,”
The developer has followed through on promises that he made in spite of some earlier controversy regarding some substitutions for some items like kitchen appliances. Still, residents I know there are very happy with the end product and the services provided. The shopping center is continuing its operations and has become increasingly popular with locals in the neighborhoods surrounding it.
The developer says that new financing has been approved and it includes the continuing subsidy for the homeowners association fees. This new Debtor-In-Possession financing requires court approval but will allow Everest to finish out the remaining units and pay for day-to-day operations as well. The new financing and bankruptcy were necessary according to Everest because the holder of the existing construction loan wouldn’t extend it unless the developer slashed prices and offered bulk discount sales. Everest said in today’s statement that it was unwilling to to that and harm the existing residents.
The bankruptcy filing specifically does not include the European Village of Homes located directly south of the condominium towers and the shopping center. That 216 unit community consists of townhomes, brownstones and stand-alone patio homes.
Everest Development Company has developed condominium and retail projects and other cities as well. One Embarcadero South in San Francisco was an Everest project.
There is only one other project in the Greenwood Village/Denver Tech Center area offering brand-new condominiums in a high-rise tower. That is Penterra Plaza located at 8100 East Union in the Denver Tech Center. Penterra Plaza differs in that it does not have a shopping center associated with it but there is the McCormick and Schmitz restaurant and some retail located nearby.
The obvious question is whether or not prospective buyers who will be choosing between the two projects will now be more likely to buy at Penterra Plaza. Time will tell.