When I bought my downtown Denver loft nearly three years ago (2003), the loft market was still in a huge post-911 rut. My building, developed by a local guy, hadn't sold a unit in months. Yet construction in the neighborhood was still steaming forward at a frenetic pace, and still is today.
I worried that the loft market was being overbuilt, and that a loft might not be the best investment.
My friend and real estate broker pointed out two things: (1) this was going to be my HOME, and I should look at it as a home, not as an investment (and if, somewhere down the road, it became an investment, that would just be a bonus); and (2) East West Properties.
East West Properties is a huge real estate conglomerate with very, very deep pockets. They bought up all the land along the Platte River, and started developing it several years ago. First, they built the Riverfront Park, which consisted of a couple of loft buildings with room for retail shops to open up on the ground floor, and a large greenspace park, with running paths, playing fields, and plenty of room to run your dog. All with the muddy old Platte River running through it.
Their gamble paid off handsomely. The park truly is a park. Dodgeball leagues call it home, setting up kegs and playing nearly every night of the week in the summer. Dog lovers risk the $80-no-leash tickets every day, bringing bottles of wine to share in the evenings while their dogs frolic. Runners and strollers and bikers flow through constantly. There are some great little shops and restaurants (Ink cafe, Zengo, that great little wine place...) And the people who live in the loft buildings are now part of a real community.
Today, it's a flurry of construction and tall cranes as East West continues to build up the area with, yes, even more lofts. Million dollar lofts. And their pockets are so deep that they can start construction on these million dollar lofts without having sold a single one. Most local developers can't even break ground until they've pre-sold about 30% of a building --- it's just too cost-prohibitive, otherwise.
Which brings me back to the original point. East West's presence in downtown Denver virtually guarantees that the bottom won't ever really fall out on this market. While local developers might drop their prices, East West has the deep pockets to allow them to hold on, even in a tough market.
Sometimes the 300 pound gorillas are a good thing.