Inside Real Estate News » Cherry Hills

Shanahan’s former home sells for $7 million

John Rebchook — Mon, 13 Sep 2010 19:56:17 +0000

Mike Shanahan's former Cherry Hills home sold for $7 million.

Mike Shanahan’s former home in Cherry Hills has sold for $7 million, the most expensive home sale in the Denver area in about two years.

The mansion, with 6 bedrooms, 9 bathrooms and 17,850 square had sold for $16 million in 2007, 56 percent more than the price it fetched last Thursday, according to public record obtained by InsideRealEstateNews. The home had recently been listed by Sandy Weigand of the Kentwood Co. for $10 million, or 30 percent more than than the selling price. Previously, she had listed it at $17 million.

Spectacular house

“This is perhaps the most spectacular estate, not only in Cherry Hills Village, but in all of Denver,” Weigand wrote in her marketing material for the home. “This Grand Dame was designed and meticulously executed by multiple award-winning Mesa Properties. It is situated at the top of a 2.5 site in the prestigious, gated community of Cherry Hills Park. A carriage house and magnificent ground complete this estate.”

According to the warranty deed, the manager of the 20 Cherry Hills LLC, which sold the home, was Steven Mooney. Mooney is Shanahan’s partner at the wildly popular Shanahan’s steakhouse, which opened earlier this year at 5085 S. Syracuse St., in the Denver Tech Center. Shanahan, the former coach for the Denver Broncos, is now the coach for the Washington Redskins. Shanahan’s current salary is $7 million a year, the same as it was in Denver. Mooney, the former CEO of the Thompson Creek Metals Co., which owned and operated molybdenum mines, did not return calls. Observers have speculated that 20 Cherry Hills LLC may be eligible for a tax-loss on the sale, something that an individual owner could not take. Shanahan was not part of the group that sold the home, Weigand said.

Sandy Weigand of the Kentwood Co. sold the mansion that Mike and Peggy Shanahan formerly owned, before building a much bigger home in Cherry Hills. Their former home sold for a $9 million loss.

Weigand, of the Kentwood Co., declined to name the new owners of the home at 20 Cherry Hills Park Drive, as she signed a confidentiality agreement. Records list the buyer as 20 CHP LLC. The limited liability company was only formed on Sept. 2, a week before the closing.

However, Weigand confirmed the new owners are local and are planning an extensive renovation.

REALLY big house not for sale

When asked by InsideRealEstateNews if Shanahan, and his wife Peggy, plan to sell their even bigger home in Cherry Hills that they built, she said they are not. “Mike and Peggy are definitely not going to sell that home,” Weigand said Sunday evening. ‘They are fully ensconced in the Washington, D.C., area – they also have a home there – but they have absolutely no intention of selling their home here.” She said the Shanahan’s have been extremely generous in allowing their home to be used for a variety of charitable fund-raisers.

The Shanahan’s other home has about 35,000 square feet and is decked out with cutting edge energy saving features, including a geo-thermal heating and cooling system and over-sized photovoltaic solar system.

Loss bigger in other cities

Patrick Finney, of 8Z Real Estate, is not surprised that the price sold for more than half of what it fetched in 2007.

“I thought it might have even gone for a little less than that,” Finney said. “If this home had been in a different market – Phoenix, for example – a home like this might have been down to $4 million or $5 million.”

He said that at the high-end of the market has been hammered the hardest by price reductions, and he doesn’t see that turning around anytime soon. “I think this is kind of typical about what is going on,” Finney said about the former Shanahan home sale. “Anything over $1 million in today’s market is really being attacked by what is going on in the global economy. You can call it the trickle-down effect, or maybe the trickle-up effect. I think what we need to say is more sustainable economy for a period of two quarters – six months of sold growth in the GDP, before there is more confidence in the economy, which will help the luxury market. And right now, there are no signs of that yet happening. Until that happens, we will not see the high-end prices rise. People are just too skittish.” (For a snapshot of homes that sold for $800,000 or more, please check this Cohomefinder.com link.)

That said, Finney thinks that the buyer of the former Shanahan estate got an excellent deal and are likely very happy. “I think they bought pretty much at the bottom,” Finney said. “I do not think that prices would drop much more. It is just a wonderful place that they bought. Still, I think that they are looking at a seven-year to 10-year hold, before they make real money on that home.

More execs needed

Local housing consultant S. Robert August said the drop in the house from its peak is endemic of a local economy that is not attracting companies that hires executives that can afford homes priced in the stratosphere.

“We do have lower unemployment than the nation, but a lot of those are for service-jobs or lower- and mid-level management jobs,” August said. “Still, a $7 million sale in this environment is a great testament to the broker and the seller in this trying upper-end market.”

Jack O’Connor, a principal of RE/MAX Professionals, said that there have only been 14 homes sales of homes $3 million or above in the Denver area through Aug. 31.

“Looking at the market in general in that price range, there are very few buyers, so it does not surprise me there was some discount given,” he said.

He said you could probably build a home of that size, “without the bells and whistles,” typically found in the most upscale neighborhood of Cherry Hills for about $3.5 million.

“But building costs and interest rates are at very, very low levels,” O’Connor said. “Those costs are only going to go up, so I would say over the long-term, the buyer got a great deal.”

Low-ball, luxury home offers

But Jason Miller of Milan Realty takes a grimmer view of what the sale represents for high-end home sales.

“This shows how weak the high end market is and how little conviction there is for a recovery anytime soon,” Miller said.

Miller also said that low-ball offers are not verboten for homes prices in the seven and eight figures. “Buyers have no issue coming in with what may seem to be an insulting offer at $7 million, on a $10 million home reduced from $17 million. Every buyer going forward will not be satisfied until they get a deal. This will keep downward pressure on prices. It looks to me like this will go on for years to come.”

It will be good for homeowners in the most expensive homes, as far as comparables used for tax purposes, he said. However, that is not good news for Cherry Hills, which can expect to collect less in property taxes, he said.

Contact John Rebchook at JRCHOOK@gmail.com

Pinnacle tops $100 million in sales

John Rebchook — Fri, 05 Feb 2010 21:49:50 +0000

Buyers paid more than $33 million last year for 53 units at the Pinnacle.

The Pinnacle at City Park South last year bucked the trend of super-slow condo sales in the Denver area.

In 2009, buyers paid more than $33 million for units in the Pinnacle, arguably making it the best-selling condo project in the Denver area last year. (Peloton in Boulder actually sold more units, according to an analysis by Hanley Wood Market Intelligence. But the Boulder market is not a direct competitor with the Denver market.)

Since 2007, when sales started at the only high-rise condo project along City Park, buyers have paid about $101 million for 174 units for the two-building community in east Denver.

“Honestly, sales were down some in 2009 for us and everyone else,” said Herb Emmeran, of Chicago-based Equity Marketing, which is in charge of sales and marketing for the only high-rise project along City Park.

“But we probably did better than most,” Emmerman added. “In the good years, which started a few years back, sales were very strong. We continued to sell very well last year. ”

In 2008, 56 units sold for $37 million – only two more than in 2009, but for $4 million more. In other words, the average price of all units sold in 2008 was $660,714, while the average unit sold last year was $611,111.

While overall condo sales in the Denver area fell by 9 percent in 2009 from 2008, according to an analysis of Metrolist data by independent broker Gary Bauer, the Pinnacle’s sales activity was even more remarkable given its price points. In the $600,000 to $699,999 price range, condo closings in the overall metro area fell by 44 percent in 2009 from 2008. And for units priced above $2 million, closed sales volume fell by 80 percent. The Pinnacle has one remaining penthouse unit on the market. The asking price? $2.75 million for 4,646 square feet of unfinished space that spans two stories. The buyer might expect to pump another $1 million or so into finishing it.

Emmerman said the most significant difference between 2009 and previous years was the age of the buyer. “When we started, we had more empty nesters. In the early years, we sold a lot of larger homes in the tower and penthouses in the first tower.”

Last year, 35 percent of the sellers were less than 35-years-old and 46 percent of them had been renters. Empty nesters, many who previously hailed from Park Hill and other nearby neighborhoods, had trouble selling their single-family homes last year, he noted.

Meanwhile, first-time home buyers were invigorated by the $8,000 federal tax credit available to them. ”That helped us maintain our sales pace,” Emmerman said. Still, older home buyers were not totally out of the market. “Sixty five percent of our buyers were over the age of 35.” He said the extension of the first-time home buying tax credit, coupled with the new $6,500 tax credit for some existing owners, also should help sales in the Pinnacle during the first half of the year, before they expire.

While many may think that Pinnacle only has high-end units, condos are available starting at just under $300,000, with other units priced to $1.2 million.

Since “Day 1,” when the project kicked off about four years ago, the average price of a unit sold has been $370 per square foot, he said. “Our current contracts are averaging about $400 per square foot. We’re not the cheapest out there. But we provide views and a location that no one else can offer.”

And while they have cut the asking prices on some units, they have not slashed them, which has been the case at other projects, he said. He said they are still able to make a profit – not as much as they originally hoped, of course – but at the same time they aren’t destroying the value of the people who bought at the Pinnacle when the overall market was much stronger.

“We wanted to maintain the integrity of the project, while still being profitable,” he said. “We might help some buyers now a little bit more with upgrades.”

When the project, developed by Opus Northwest, first kicked off about four years ago on the site of the former Mercy Hospital, Emmerman said they weren’t sure how well it would be accepted.

“But it has never been an issue of being accepting it; everyone immediately loved it,” Emmerman said. “It’s been a great asset to the neighborhood. Everyone loves that you can just shoot up 17th and it is easy to get to downtown. It’s also an easy drive to I-70.

That’s exactly right, said Debbra Fagan, a broker with Fuller Sotheby’s International Realty. Fagan and her business partner, fellow Fuller broker Wendy Handler, have sold a number of units at the Pinnacle.

“Our clients who have moved into the Pinnacle just love it,” Fagan said. “They think it has a Manhattan-type view. It’s like living over Central Park. And you have everything downtown, all of the 17th Avenue restaurants, and all the new developments along Colfax, including the new Tattered Cover, which is just around the corner. And, of course, everyone loves having the park right there.”

She said most of the buyers at the Pinnacle also checked out some condo developments in downtown, as well as in nearby LoHi, because a number of those projects also offer fantastic views. She said few of her buyers at the Pinnacle looked at suburban projects, such as the Landmark. Typically, buyers at the Landmark are moving from big homes in Cherry Hills or Greenwood Village, and want to stay in that area.

But Dee Chirafisi, co-owner of Kentwood City Properties, said some clients have wanted to see everything out there, in the downtown area or along the southeast suburban corridor. In fact, she has found that very few of her buyers at the Pinnacle seriously considered more low-rise buildings in and around downtown.

“It’s a lifestyle change,” Chirafisi explained. “A lot of high-rise buyers want to see all of the high-rises and decide whether they want to be more urban or more suburban. They want the lock-and-leave lifestyle, and all the amenities, such as the pool and workout rooms. And with light rail, people who buy at places like the Landmark can quickly and easily get downtown.”

That said, she said no one she has put into the Pinnacle has regretted it.

“It’s a great building,” Chirafisi said. “It’s very well constructed and has a developer with a great reputation behind it. People love the location, especially now with all of the great things happening along Colfax. And those views are just unbelievable and one-of-a-kind.”

Hanley Wood Market Intelligence ranked top condo closings last year by a variety of measures, at the request of InsideRealEstateNews.com. It gathered information from developers and public records.

Inside Real Estate News » Cherry Hills

Shanahan’s former home sells for $7 million

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