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January 7-January 20, 2015 — COLORADO REAL ESTATE JOURNAL — Page 11
Boulder County & U.S. 36 Corridor
by Jill Jamieson-Nichols
A local buyer paid $3.6 million,
or $127.55 per square foot, for
a multitenant office building in
Boulder.
Railhead One LLC, managed
by John Reynolds of W.W. Reyn-
olds Cos., bought the Wilderness
One building at 2995 Wilderness
Place from Wilderness One LLC.
The two-story, 28,224-sf building
is approximately 90 percent occu-
pied by multiple small tenants,
according to Brit Banks of Dean
Callan &Co., who represented the
seller.
The property was on the mar-
ket for quite some time and saw
increased interest as the economy
improved, Banks said.
Most of the investors who con-
sidered the asset looked at its as
an opportunity to make substan-
tial improvements to the building,
which was constructed in 1984,
said Banks, who added that the
seller didn’t have themeans orwill
to take on a major repositioning.
The buyer has been looking for
“good assets” in “strong locations”
andhasn’t determined its plans for
the property, said Chad Henry of
W.W. Reynolds, who represented
Railhead One in the transaction.
Henry said the building offers
a central Boulder location and
“good bones.” Plus, “There are
some value-addopportunities,”he
said.s The Wilderness One building sold for $3.6 million.
tunity “with time and patience
and money,” she said. But, for
Google, time was of the essence.
“Staying still is really not an
option. In our crazy evolution,
we’ve grown quite rapidly, and
we expect to continue to grow,”
Scott Green, Google’s site direc-
tor in Boulder, told the Boulder
Planning Board at a recent hear-
ing.
Boulder City Council’s deci-
sion to not “call up,” or review,
the planning board’s approval
of the campus allows the proj-
ect to move to building permit
review.
“Timing was critical for us,
so the fact that we are moving
forward allows us to remain
on time for getting the proj-
ect moving when it needs to
move,” said Google spokesman
Curtis Hubbard.
The Google campus, being
designed by Tryba Archi-
tects, will feature the kinds of
employee amenities the com-
pany is known for: pingpong
and pool tables, a cafeteria and
other things “to keep employ-
ees engaged and excited,” said
Hubbard. It also will include
the company’s signature Tech
Talk space for hosting commu-
nity and public events.
“One of the really unique
things is that the campus is
bisected by a public multi-use
path and open space. So people
walking or riding their bike
in this part of Boulder will be
able to go right through the
campus, stop, look around and
really feel that it’s welcoming to
them,” Hubbard said.
A central entry plaza will be
built atop a 500-space, below-
grade parking garage. There
also will be at least one Boulder
B-cycle station, parking for 200
bicycles, bike lockers and space
where employees can work on
their bikes.
“The proximity to the transit
center was one of the keys for
the company in selecting this
location,” said Hubbard, not-
ing Google provides Regional
Transportation District EcoPass-
es for its employees. Currently
about 40 percent of Google’s
Boulder employees use some-
thing other than single-occu-
pancy vehicles to get to work,
and Hubbard said the company
will be working with the city on
ways to drive that number up.
The campus will be LEED
Gold certified, at minimum,
and will include a 140-kilowatt
rooftop photovoltaic array.
Following a City Council dis-
cussion regarding the planning
board’s conditional approval
of the Google campus, Green
released a statement that said,
“We are pleased with the deci-
sion to support the previous
reviews and look forward to
getting the project underway.
We will continue our work to
be a community partner that is
proud to call Boulder home.”
Otis said the campus “will
become an icon in Boulder that
will for many years generate
significant rewards for the com-
munity.”
“In addition, the ancillary
entrepreneurial pursuits of the
employees is bound to have far-
reaching benefits not only for
Boulder but for the entire state.
I’m happy to be part of a very
exciting project for Boulder and
Colorado.”s
The two-story,
28,224-sf
building is
approximately
90 percent
occupied by
multiple small
tenants.
willing to pay the highest
price,” Johnson said. “They have
a terrific building that will be
easy to operate.”
The sale price equals about
$150,000 per unit.
This was their second transac-
tion for the buyer this year.
Earlier, they sold him a 12-unit
building at 1345 Monroe St. in
Denver for $1.89 million.
Johnson said these were the
first deals that he and Malnati
have done related to the mari-
juana industry.
“In this case, of course, wewere
not directly involved in the mari-
juana deal, but you might say we
were, indirectly, from the sale, by
selling him two apartments in the
exchange,” Johnson said.
Clearly, he said that marijuana
is having a big impact on real
estate in the Denver area.
“Certainly, you are seeing it
across product types,” he said.
“It is having a big impact on retail
storefronts, as well as support
and grow houses that need ware-
houses,” Johnson said.
And, as with their case, it is
having an impact on individu-
als who sell properties in the
marijuana business who want to
become involved in more tradi-
tional real estate ventures, such
as owning apartments.
Johnson said it is unclear
whether many people who are
selling their marijuana-related
buildings are sophisticated
enough to know they can buy
other income-producing proper-
ties to defer their taxes in a 1031
exchange.
Erin Crowley, a division man-
ager of Asset Preservation Inc.,
which is part of Stewart Title, is
an expert in 1031 exchanges.
Crowley said she can’t quan-
tify how many people in the pot
business are taking advantage of
the exchanges, as when she puts
buyers into them, it is not her
role to ask the use of the property
sold.
However, anecdotally, she
believes more and more people
in the marijuana business are
using them.
“Not a lot of them know about
1031 exchanges, but their brokers
usually are sophisticated enough
to know about them,” Crowley
said.
She suspects that marijuana
is fueling a growing number of
1031 exchanges in Colorado.
“Definitely there is an uptick,”
Crowley said. “We are seeing a
surge in 1031s for warehouses,
commercial buildings and land.”
In some cases, those in the pot
business may be facing huge
gains on properties and will be
facing large tax bills if they don’t
have a property lined up as a
replacement in a 1031 exchange,
she said.
That can be a problem if the
owners planned to own a prop-
erty for the long term, “but were
given an offer that they just can’t
refuse,” she said.s
Advisors represented the sellers.
“This was a very competitive
process as Denver, and especial-
ly the Denver Tech Center sub-
market, continues to see fantastic
growth in the key fundamentals.
The recent renovations completed
by prior own-
ership should
allow new
ownership to
capitalize on
both increased
o c c u p a n c y
and ADR
(average daily
rate) for great
success in the
very near term
and beyond,” Dube said.
While Dube focuses primarily
on assets in the Rocky Mountain
region, he said he knows from
speaking with colleagues that
Chinese investors are increasing-
ly willing to consider noncoastal
market such as Denver as the
hospitality market becomes more
frothy. Denver has positioned itself
well from a RevPar (revenue per
available room) standpoint, he
said. s
Mike Dube
‘This was a very
competitive
process as Denver,
and especially
the Denver Tech
Center submarket,
continues to
see fantastic
growth in the key
fundamentals.’
– Mike Dube,
HREC Investment Advisors