Prior to the COVID-19 pandemic, downtown Denver\u2019s Hyatt Regency \u2014 one of the city\u2019s largest hotels, with about 1,100 rooms \u2014 was valued at nearly $300 million by Denver County.<\/p>\n
Now, however, it\u2019s considered to be worth $207 million \u2014 30 percent less.<\/p>\n
Denver Assessor Keith Erffmeyer told BusinessDen last March that his office\u2019s overall valuation of commercial property in the city was set to drop for the\u00a0first time in a decade\u00a0due to the pandemic, with hotel and retail properties seeing the largest drops. New valuations were released two months later, in May.<\/p>\n
Now, data obtained by BusinessDen shows the specific impact on some of the city\u2019s marquee hotel and retail properties.<\/p>\n
In addition to the Hyatt Regency, multiple other downtown hotels are considered to be worth tens of millions less than pre-pandemic. And the Westin attached to Denver International Airport saw its valuation drop $29 million.<\/p>\n
On the retail side, the largest component of the Cherry Creek Shopping Center, which is divided into multiple parcels, saw its valuation fall 16 percent in the latest cycle, from $283 million to $237 million.<\/p>\n
Speaking to BusinessDen last week, Erffmeyer noted that the latest cycle assessed properties between July 1, 2018, and June 30, 2020 \u2014 meaning the figures capture a moment still relatively early in the pandemic, when stay-at-home orders were fresh in mind and some businesses were just starting to reopen.<\/p>\n
\u201cWe had to kind of tackle this a little bit differently this time around,\u201d Erffmeyer said. \u201cThe hotel and travel industries were in a state of the unknown. At that point in time, everything was pretty much shut down, especially urban hotels.\u201d<\/p>\n
Nick LeMasters, president and CEO of the Cherry Creek North Business Improvement District, said the lower valuations were expected. The BID provides assistance such as street maintenance and promotions to members who are assessed a fee based on property values.<\/p>\n
\u201cWe were not terribly surprised when we found out about the valuations decreasing, certainly given COVID,\u201d LeMasters said. \u201cIt became pretty apparent that was going to affect properties at some time, hotels in particular.\u201d<\/p>\n
LeMasters, previously\u00a0general manager of Cherry Creek Shopping Center\u00a0for more than two decades, said retailers may see a drop in their rent but not by a lot.<\/p>\n
\u201cThat could be some benefit to some retailers and some businesses, though I don\u2019t think it\u2019ll be that much,\u201d LeMasters said. \u201c(Landlords) spread the cost to the tenants, and it might drop the charges a few cents a square foot.\u201d<\/p>\n
Citywide, the merchandising sector was valued at $1.6 billion during the last valuation period, but dropped to $1.3 billion in the most recent. Lodging properties were valued at nearly $850 million during the previous valuation period, but fell to $775 million during the most recent.<\/p>\n
LeMasters said leisure tourism and business travel is starting to return, but he said \u201cgroup business,\u201d such as conventions, needs to return in a significant way. Once that happens, he said, hotels will be on \u201cvery solid ground.\u201d<\/p>\n
\u201cI would have every expectation that valuations will go up as business returns,\u201d LeMasters said, adding downtown hotels usually fill up first and then Cherry Creek sees the overflow business. \u201cBut certainly, the hotel sector has been adversely impacted, and we need to see our tourism industry come back.\u201d<\/p>\n
Here are the top 10 valuations for hotel\/lodging and retail properties. Most, but not all, saw their valuation decline. Some properties that might appear to be one unit, such as the Cherry Creek Shopping Center and the downtown Sheraton, are technically multiple parcels, so appear below as such.<\/p>\n