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COLORADO REAL ESTATE JOURNAL
— June 1-June 14, 2016
Metro Denver
by John Rebchook
Mike Kboudi, a Cushman &
Wakefield broker, kicked off the
2016 Residential Land Develop-
ment Conference and Expo by
saying this: “Denver is kicking
tail.”
More than 400 residential and
commercial real estate experts
attended the half-day conference
May 6.
“All market segments are in a
growth mode,” Kboudi, a land
broker, said at the conference
sponsored by Colorado Real
Estate Journal.
“Office, apartments, senior
housing, homebuilders – they
are all looking for ground. That’s
where we are in this part of the
cycle,” he said.
However, the panel mem-
bers, including keynote speaker
David Mandarich, president and
chief operating officer of Den-
ver-based MDC Holdings Inc.,
said the biggest challenge is con-
structing affordable, or what was
frequently described as “attain-
able,” housing.
Mandarich noted that the Den-
ver area has the most expensive
housing between the East and
West coasts.
At a macro level, the increas-
ingly expensive housing in the
Boulder-Denver area has a huge
cost, said Heidi Majerik, a vice
president of business develop-
ment at Wonderland Homes.
She said that Austin, Texas, is
“starting to beat us” at attracting
educated millennials, because
Austin housing prices are so
much less than those in the Den-
ver area.
At the root of the affordability
problem is that land prices keep
rising, as do fees placed on them
by local municipalities.
“Land costs are huge,” said
Matthew Osborn, president of
Colorado Tri Pointe Homes LLC.
“You can throw down $120,000
for a finished lot,” said Osborn,
who spoke on the homebuilder
panel.
He said five years ago, if some-
one had told him it would cost
six figures to bring a finished lot
to market, with all of its entitle-
ments and tap fees, he would
have laughed.
Given the cost of land, it is very
difficult to deliver new homes in
the $200,000 to $300,000 range,
said Brock Chapman, the region-
al manager for True Life Cos., a
speaker on the developer panel.
Richmond American Homes,
which is owned by MDC, is
doing it by offering a series of
homes that are smaller and with-
out basements, Mandarich said.
An audience member asked
Mandarich if Richmond is receiv-
ing any “push back” from con-
sumers because the homes don’t
have basements.
None at all, he replied.
“Remember, most homeown-
ers in the country do not have
basements,” Mandarich said.
Also, the finishes in the homes
are as nice as much more expen-
sive homes, he said.
Buying land is especially tough
if you are not a national home-
builder like MDC, which can tap
“ridiculously low rates” from
Wall Street, something that non-
publicly traded companies can-
not do, said Creig D. Veldhui-
zen, a managing director at Terra
Causa Capital LLC.
And the development costs
continue to rise, said Veldhuizen,
who also spoke on the develop-
ment panel.
“Fees never go down,” said
Veldhuizen, whose company,
among other things, is devel-
oping the sustainable Candelas
community in Arvada.
Demand for housing, both for-
sale and rental, is far outstripping
the supply.
The “attainable housing piece”
is the biggest challenge facing
From left, Heidi Majerik, Matt Osborn and Steve Erickson
Land planner David Clinger shows his “cluster” concept for suburban
housing developments.
David Mandarich, president of MDC Holdings Inc., was the keynote
speaker at CREJ’s land conference.
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