joint venture development team
TRANSCRIPT
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Joint Venture Development Team
Land Owner (Sears)Office, Retail & Residential Developer (Nichols Partnership Inc.)Hotel Developer (Sunstone/Westbrook)City of Denver (Parking)
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LocationUniversity and 1st AvenueCherry Creek Shopping District
Cherry Creek MallCherry Creek North Retail District
One of Denver’s Only Urban PlacesLocated on the corner of “Main and Main”
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Cherry Creek
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The DevelopmentUrban Village ConceptMixed Use – Retail, Office, Residential, Hotel490,000 SF of New Construction1,600 Parking Spaces180,000 SF of Existing Buildings
Whole FoodsSears
Uses Established by Users
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Development Model
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Site Plan
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Second Floor Plan
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Parking Level B-1
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Janus World Headquarters
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JW Marriott Hotel
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Entitlement Issues
Politically Active NeighborhoodLast Large Parcel of Land in Cherry CreekRezoned to CMU-10 from CCNTraded Height Restriction for Hotel“Clayton Lane” = Private Street
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Clayton Lane
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Clayton Lane – “Placemaking”
2-Way Traffic with Street ParkingSidewalks – 13’-28’ Wide Plaza & CourtyardStone & Brick PavingSignage, Lighting, Street Furniture, Banners, MusicPrivate Street – Festivals, Farmer’s Market
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Landscape Design
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Architectural Intent
Urban CharacterArticulate StorefrontsModern and Traditional MaterialsParking – Out of SiteEstablish Identity... but Tie into the DistrictLight and AirClayton Lane = Gateway to Cherry Creek North
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Phase I – Parking Structure/Retail
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Phase I – Parking Structure /Retail
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Crate and Barrel
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Crate and Barrel
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Hotel and Retail
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Residential/Retail
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Schedule
Phase I – Parking Structure/Retail = January 2003Janus World Headquarters = December 2003JW Marriott Hotel = June 2004Clayton Lane Retail, Grand Opening = Nov. 2004Residential = December 2004
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“Lifestyle Retail”Housewares – Crate & Barrel, Design Within Reach, Bose, HW Home, ArhausFashion/Jewelry – Orvis, White House/Black Market, John Atencio JewelersRestaurants – North, Bob’s Steak House, MirepoixLuxury Services – The Spa at Cherry Creek, La Fontaine, Antoine du ChezConvenience – Whole Foods, Peet’s Coffee, ColdstoneCreamery, The Bike RackFinancial Services – Wells Fargo
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Retail DemographicsAvg. Household Income = $105,000!Avg. Age = 43Highly Educated and Skilled Workforce
Traffic Count1st Avenue = 60,000 cars/dayUniversity = 46,000 cars/day
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Development CostsParking Structure/Retail - $18MJanus Office/Retail - $61MRetail – $30MResidential - $14M
Total Cost = $123M
Hotel - $40M
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Initial Equity Financing
Land - $16MCash - $6.85MDeferred Development Fee - $1M Mezzanine Debt - $3M
Total Equity = $26.85M
(Subsequent Phases are Financed from Ongoing Operations)
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Risks – Mixed Use
Zoning/Approval: Additional Uses = ControversyFinancing: Loan Size = Syndication
Multiple Uses = Limits LendersConstruction: Complexity, Different Building TypesTiming: Interest Rate Exposure, Cost IncreasesAll Components Must WorkDevelop Unfamiliar Building Types“Ready, Fire, Aim”
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Risk MitigationParking Structure/Retail: 65% Pre-leasedJanus Building: 86% Pre-leased, 10% Return on CostRetail: 52% Pre-leased, 77% Pre-Lease RequirementResidential: 50% Pre-Sale RequirementHotel: Sold to Hotel Developer
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Exit Strategy
Office: Sell 15 yr. BBB+ Credit Lease at 7.4% CAPRetail & Parking: Hold and Finance, 6%Residential: Sell Condominiums, $435 psfHotel: Sold Pad and Parking to Hotel Developer, $36,000/key
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Synergy of Mixed Use
Office Tenants: Walking Distance to ServicesResidential: Premium Sales PricesHotel: “Built-in” Room NightsRestaurants: Lunch Customers (Office & Retail)
Dinner Customers (Hotel)Retail: Other Uses “Feed” the RetailParking: Shared Usage“The Whole is Greater than the Sum of the Parts”
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Key Developer Relationships
Joint Venture PartnersPlannerCity Councilman/Neighborhood AssociationsConstruction LenderEquity InvestorsArchitectConstruction ManagerLeasing Agents
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“Managing Conflict”
Developer/Neighborhood AssociationsDeveloper/LendersContractor/ArchitectContractor & Architect/City AgenciesArchitect/EngineerConstruction Manager/ContractorDeveloper/Leasing Agent
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Site Aerial
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Questions and Answers
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Project Poster