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by Jill Jamieson-Nichols
Denver’s industrial real
estate market is firing on
all cylinders, with rental
rates climbing 12 percent
beyond their previous
peak and tenants leasing
space faster than develop-
ers can deliver it.
“There is not enough
product
for all
the ten-
ants that
are out
t h e r e , ”
s a i d
C B R E
F i r s t
V i c e
P r e s i -
d e n t
Paul Kluck, who said 2014
marked the first time in
his career that tenants pre-
leased industrial space in
Denver.
“Preleasing of industrial
buildings before comple-
tion is
a l m o s t
unheard
of in the
De n v e r
marke t ,
and it’s
b e c om -
ing the
n o r m , ”
c o n -
c u r r e d
Newmark Grubb Knight
Frank Executive Manag-
ing Director Mike Wafer.
Prices for industrial
properties are near their
peak, and rental rates have
spiked. Rates for industrial
space along the Interstate
70 corridor in the north-
east industrial submarket,
Denver’s dominant indus-
trial area, jumped from
$3.90 per square foot triple
net in 2013 to $4.82 per sf
last year, compared with
a previous high of $4.62
per sf in 2007, according
to CBRE First Vice Presi-
dent Bill
Thomp-
s o n .
T h a t ’ s
b e t t e r
than the
national
industri-
al vacan-
cy rate
of 4.51
percent,
according to Ann Sperling,
senior director of Tram-
mell Crow Co.
Rental rate increases will
moderate this year, yet,
“Landlords will continue
to rule,” said Kluck.
Industrial real estate
experts gave their takes
by John Rebchook
Griffis/Blessing Inc. recently
paid $45.5 million for the 260-unit
Bear Valley Park Apartments in
Lakewood, an increasingly popu-
lar submarket in the Denver area.
“Located in the highly desirable
Lakewood submarket, minutes
from major thoroughfares and
River Point shopping district, as
well as being adjacent to the Bear
Creek Trail System, make this
asset a valuable addition to our
multifamily portfolio,” said Wil-
liam J. Hybl Jr., president and chief
operating officer of Griffis/Bless-
ing’s Property Services Group.
Colorado Springs-basedGriffis/
Blessing paid the equivalent of
$175,000 per unit and $175.74 per
square foot for the 258,980-sf com-
munity at 788 S. Reed Court.
According to public records, the
seller, San Francisco-based Carmel
Properties, paid $33.95 million for
the community in 2012.
In other words, Carmel sold it
for 34 percent more than what it
paid after two years of owning it.
Carmel paid the equivalent of
$138.24 per sf and $130,577 per
unit for Bear Valley Park.
Griffis/Blessing described
Bear Valley Park as a “Class
A-/B+” property. The average
unit size is 996 sf.
Community amenities include
a newly renovated clubhouse, a
swimming pool, a state-of-the-art
fitness center, outdoor barbecues
and a fire pit. Residents also enjoy
by John Rebchook
Years ago, someone gave
Joe Vostrejs the book, “The
Great Good Place: Cafés, Cof-
fee Shops, Bookstores, Bars,
Hair Salons and Other Hang-
outs at the Heart of Commu-
nity.”
Today, there is little doubt
that the title of that book by
Ray Oldenburg would aptly
describe how Vostrejs and his
partners have renewed and
reshaped the urban fabric of
Denver.
They did it with numerous
highly successful neighbor-
hood retail and restaurant
developments scattered
throughout the city.
“The book talked about
with all of the big suburban
planning and highways,
we’ve kind of destroyed what
he called the ‘third place,’”
said Vostrejs, the 54-year-old
chief operating officer and
partner with Larimer Associ-
ates. He also is a partner of
a separate group, City Street
Investors.
The first two places are
where you work and where
you live.
“The third place is where
you go to have this sense of
community,” Vostrejs said.
“It used to be the barber-
shop, where people would
gather and talk about every-
thing under the sun. It didn’t
matter if you were a doctor
or a dentist or a plumber or
how much money you had.”
In total, Larimer Associ-
ates and City Street Investors
own 35 properties, which are
worth about $70 million.
That does not include Lar-
imer Square, which is owned
by Jeff Hermanson through a
family holding company.
Hermanson is the CEO of
Larimer Associates and is
a partner with Vostrejs on
many of the Denver holdings,
which include such high-pro-
file and popular restaurants
and real estate venues as
Rioja, Hangar 2 Lowry, TAG/
Raw Bar, Ernie’s Bar & Pizza,
LoHi Steakhouse, Kazoo Toy
Store and Billy’s Inn, just to
tick off a handful.
Almost all of them would
be prime examples of a third
place.
Another great example of a
third place is the Sloan’s Bar
& Grill in Edgewater, which
was developed and is owned
by City Street Investors.
They opened it more than
a decade ago at 5850 W. 25th
Ave.
“It’s kitty-corner from the
police station and it is not on
any major street. Its neigh-
bors are single-family homes.
At the back, there is parking
for about eight cars.”
And, “It’s been a hit from
Day One,” Vostrejs said,
despite violating the three
most important rules of retail:
location, location, location.
“If you walk in Sloan’s
any Wednesday or Thursday
night, there will be 100 peo-
ple there,” Vostrejs said.
“You wonder where they
come from.”
The answer is that they
come from the neighborhood.
Most of the patrons walk to
the establishment and know
each other, he said.
“When I walk in the front
door, it takes me 20 minutes
to get to my table, because
everyone there knows me
and has a story to tell,” he
said.
Another great example is
the building at West 32nd
Avenue and Lowell Boule-
vard in the now uber-trendy
West Highland neighbor-
hood.
Larimer Associates bought
the building, the former
Speer Furniture store, almost
20 years ago.
A Chipotle, the seventh
in the Denver-based chain,
anchors it.
“Steve Ells (the founder of
the now giant and hugely
successful chain) signed the
lease, personally,” Vostrejs
said.
“I don’t think these days
Steve Ells signs many leases
or walks the site with guys
like me, like he did at 32nd
and Lowell. At that time,
Steve was just an up-and-
coming chef,” Vostrejs said.
Providing real estate oppor-
tunities and often needed
start-up and operating capital
to chefs is a key component
of Larimer Associates today.
Larimer Associates has
teamed up with such well-
known Denver chefs as Jen-
nifer Jasinski, Sean Kelly and
Troy Guard.
“We have the real estate
and management exper-
tise, while a lot of these
really excellent chefs are
often underfunded,” noted
Vostrejs.
“It’s mutually beneficial for
us to provide them the plat-
form, so they can concentrate
on what they do best – pre-
pare great meals,” he said.
Yet, even successful devel-
opments aren’t without crit-
ics.
“This is a true story,”
Vostrejs said.
“When we first put Speer
Furniture under contract
at 32nd and Lowell, I got a
phone call from a woman
Joe Vostrejs
SECTION AA
FEBRUARY 18-MARCH 3, 2015
Shown is the Bear Valley Park Apartments in Lakewood. Paul Kluck
Bill Thompson
Mike Wafer