Boulder News

Monday Business Roundup

What Real Estate Slump?

By Richard Martin, 7-02-07

As the real estate bust continues to eat away at Americans’ personal savings, things are looking pretty sweet to a group of realtors in Denver who have bought and flipped condos in the new Glass House in the Riverfront Park neighborhood. Investors have quickly resold the units – which went on sale last fall for prices in the $200,000-$400,000 range – for profits stretching beyond 20%. The developer, East West Partners, “is moving forward with a similar project called City House, a 23-story tower expected to break ground later this year,” reports the Post.

Other downtown condo projects are faring equally well: 11 of the 18 units in The Park|One Riverfront are under contract before a spade has been turned.

In advance of next summer’s Democratic Convention, downtown commercial real estate is hardly suffering, either: “In the first six months of the year, investors paid $2.5 billion for commercial properties, which will likely break last year’s record of $5 billion by year’s end,” reports the Rocky’s John Rebchook. The two largest commercial real estate deals in Denver history have both taken place within the last several months: the $770 million sale of a portfolio of buildings to Chicago-based Callahan Capital Partners, and LBA Realty’s purchase of the Denver Place center for around $200 million. Denver Place is across the street from the brand new Ritz Carlton, opening in fall 2007.

In other business news:

-- A group of five Western Senators has introduced a bill to reduce taxes on precious metals and coins, currently treated as collectibles and taxed in the 28-percent range. A similar bill authored by Nevada congresswoman Shelley Berkley has been introduced in the House with the support of Rep. Marilyn Musgrave of Colorado, whose husband stands to make out well if it passes. According to Fort Collins’ Rocky Mountain Chronicle, Steve Musgrave “has investments worth between $50,001 and $100,000” in metals and coins.

-- While the federal government prepares to auction off a big slice of the radio airwaves in the 700 MHz range, which in theory will be used for a nationwide wireless broadband network, Qwest Communications is lobbying to re-direct federal wireless subsidies away from the phone companies (Gasp!) and toward state governments in the form of grants to deploy rural broadband networks. Everyone agrees that a nationwide a state of the art wireless broadband network is a necessity, particularly for remote areas in the West that don’t have wireline broadband. The question facing operators, consumer and business users, and the government is, naturally, “Who’s going to pay?” for it.

-- One of the great things about living within an hour of Denver International Airport is that you can step on a plane with a direct flight to just about anywhere – except for the booming capitals of East Asia. United’s senior vice president of planning, Kevin Knight, repeated at a DIA Partnership luncheon last week that the carrier is unlikely to offer direct service to Tokyo, Hong Kong or Seoul any time soon – partly because the thin air makes it harder to take off with enough fuel to cross the Pacific, and partly because “"We would have to fill the seats each and every time we take off,” Knight said. DIA officials are still hoping that an Asian carrier, like Air China, will launch flights. 

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