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March 18-March 31, 2015 — COLORADO REAL ESTATE JOURNAL — Page 3AA
Industrial
by Jill Jamieson-Nichols
Denver-based DCT Industrial
picked up nearly 700,000 square
feet of industrial space in Aurora
with the purchase of Airport Dis-
tribution Center.
The Class A industrial park was
97 percent leased. It comprises
689,557 square feet in five build-
ings near Interstate 70 and Cham-
bers Road.
“The acquisition of these Class
A assets offers DCT an excellent
opportunity to expand our pres-
ence within the desirable I-70/
northeast submarket, known for
its strong tenant demand and easy
access to major interstates and
Denver International Airport,”
said Mark Bowen, senior vice
president, DCT Industrial. “We are
very excited to be adding to our
existing Denver portfolio at a time
when the market is experiencing
record-low vacancies due to the
growing economy.”
DCT bought Airport Distribu-
tion Center from The Pauls Corp.
The price wasn’t released.
The Pauls Corp. acquired the
asset for $33.05million in 2004 in a
highly competitive deal. The prop-
erty was “very selectively market-
ed” this go-around, according to
Denver industrial broker Jim Bolt
of CBRE, whowas not involved in
the transaction.
Bolt said Airport Distribution
Center is a “great portfolio – real-
ly well-located, Class A in every
regard.” It represents a “fantastic
acquisition for DTC,” he said.
Airport Distribution Center was
built in the late 1990s. It is locat-
ed in the Interstate 70/northeast
industrial submarket with excel-
lent access to I-70 and I-225 and
I-25, DCT noted. It also has great
access toDenver InternationalAir-
port via Peña Boulevard.
Located at 15845 E. 32nd Ave.,
two of the buildings are connect-
ed, offering a total of 245,400 sf.
They were built in 1997. The park
also includes: a 136,957-sf building
constructed in 1997, a 220,800-sf
warehouse at 15965 E. 32nd that
was built in 1998 and an 86,400-sf
building constructed in 1999 at
16075 E. 32nd.
The acquisition brings DCT’s
Denver industrial portfolio to
1.74 million sf, which represents
approximately 2.3 percent of its
total portfolio. The company last
year acquired 5.6 million sf for
$363.1 million and expects to pur-
chase another $200 million to $300
million of stabilized and value-
add properties in 2015. It also
plans development starts of $100
million to $200 million.
DCT Industrial is a leading
industrial real estate company
specializing in acquisition, devel-
opment, leasing and management
of bulk distribution and light-
industrial properties in high-vol-
ume U.S. distribution markets. As
of Dec. 31, the company owned
interests in approximately 72.3
million sf of properties leased to
approximately 900 customers.s
CoStar Group
The building at 16075 E. 32nd Ave. in Aurora is among five buildings in
Airport Distribution Center.
by Jill Jamieson-Nichols
Foreign capital acquired 2
million square feet of industrial
space in Denver as part of the
$8.1 billion purchase of the Ind-
Cor Properties portfolio – one of
the largest logistics platforms in
the United States.
Singapore-based Global Logis-
tic Properties and GIC, Singa-
pore’s sovereign wealth fund,
bought the portfolio from real
estate funds affiliated with The
Blackstone Group. The portfo-
lio spans 117 million sf of high-
quality industrial space in key
U.S. markets and was 91 percent
occupied.
GLP is a leading global pro-
vider of logistics facilities with
312 million sf in China, Japan
and Brazil.
“This transaction establishes
immediate scale in the U.S. as
well as a strong platform for
future growth,” Ming Z. Mei,
GLP’s chief executive officer,
said in a statement. “Given the
quality and the strong market
fundamentals, we are confident
that we can increase the lease
ratio and capture positive leasing
spreads in the near future. The
strong existing U.S. team which
joins GLP further strengthens our
team.”
The deal involved 16 bulk dis-
tribution and smaller-bay ware-
house properties in Denver’s
leading industrial submarket,
which is located along the eastern
Interstate 70 corridor. It positions
GLP/GIC as one of the larger
owners of industrial properties in
the market. Prologis is the largest
owner with 5.5 million sf. Majes-
tic Realty owns and operates 3
million sf.
GLP holds a 55 percent stake
in the IndCor portfolio initially.
The fund syndication currently
is oversubscribed, and the com-
pany expects to reduce its stake
to 10 percent by August. GIC
holds 45 percent.
The portfolio will be rebranded
to andmanaged by GLP. It is con-
centrated primarily in markets
with high barriers to entry and
populations of 1 million or more
that make them ideal for last mile
e-commerce deliveries, according
to GLP.
The transaction is in line
with GLP’s growth strategy of
expanding into the best logistics
markets internationally via its
fund management platform. The
transaction brings the company’s
assets under fund management
to $20.4 billion.
“We built IndCor through 18
acquisitions to be one of the larg-
est industrial real estate com-
panies in the United States. We
are excited about the company’s
future prospects under new long-
term ownership with GIC,” Ind-
Cor CEO Tim Beaudin said in a
statement prior to closing. s
The 16 Denver buildings purchased by GLP and GIC included the
approximately 307,000-square-foot building at 5301 Peoria St.
by Jill Jamieson-Nichols
United Properties continues to
draw tenants to Enterprise Busi-
ness Center in Stapleton, signing
its first lease in a 466,540-square-
foot speculative industrial build-
ing that it is developing.
Priority Wire & Cable, a wire
and cable supplier, leased 88,575 sf
to expand its national network of
distribution centers intoColorado.
“It’s good to see another new
company to Denver,” said CBRE
Senior Vice President Mike Camp.
“They feel like it’s a place that has
a good, vibrant economy and they
need to be here to service their
customers,” he said.
Priority Wire & Cable is based
in Little Rock, Arkansas. Camp
and Corby Rolin of CBRE rep-
resented the tenant in the lease
transaction.
The building is the fifth to be
built at Enterprise Business Cen-
ter and comprises the second
phase of the park, located near
the southwest corner of Interstate
70 and Havana Street. General
contractor Murray & Stafford will
complete construction by the end
of April. Ware Malcomb is the
architect.
“Wewere fortunate that Priority
Wire&Cable selected our location
and helped kick off the lease-up of
the next phase,” said Kevin Kel-
ley, vice president of United Prop-
erties. “Large blocks of available
space are diminishing quickly in
the central area, and as a result
we are negotiating with multiple
users for the remaining vacancy.”
Newmark Grubb Knight
Frank brokers Mike Wafer and
Tim D’Angelo handle leasing at
Enterprise Business Center, which
launchedtheDenvermarket’scur-
rent round of speculative industri-
al construction and helped make
preleasing of industrial space in
the market commonplace.
The industrial market is tight
and continues to tighten in spite
of the construction underway
in the market, said Wafer. “The
construction that’s underway is
not keeping up with demand,”
he said, adding there are very few
large blocks of space available.
The first phase of Enterprise
Park, a Class A industrial devel-
opment, consisted of four build-
ings with more than 701,000 sf,
670,770 sf of which is leased.
United Properties is a Min-
neapolis-based commercial real
estate development and invest-
ment company.
Other News
n 2014 was the strongest year
for industrial construction in the
Denver market since 2008, with
more than 2.8 million square feet
delivered, according to CBRE.
“While some developers err on
the conservative side with rents
still not cresting prerecession lev-
els and rising construction costs,
there is strong growth in both
speculative and build-to-suit con-
struction owing to high demand,
particularly for ClassAspace,” the
company said in its 2015 Denver
Market Report. More than 3 mil-
lion sf was under construction as
of the fourth quarter, up 17.9 per-
cent from the previous year.
Drivers for the increased activ-
ity included a big improvement
in residential construction – a 45.9
percent increase in permits for sin-
gle- and multifamily homes. The
marijuana industry has absorbed
an estimated 3 percent of Denver’s
inventory, mostly Class B and C
space, helping push prices higher
in certain market segments, CBRE
noted.
Last year’s industrial construc-
tion included the largest specula-
tive industrial building ever con-
structed in the Denver market, a
500,000-sf warehouse at Majestic
Commercenter. More construction
is projected to break ground this
year, including Crossroads Com-
merce Park, a Trammell Crow
project planned to include approx-
imately 1 million sf.
Thevacancyrateat theendof the
fourth quarter – the 19th consecu-
tive quarter of positive absorption
– was 4.6 percent, according to
CBRE. Approximately 3 million
sf was absorbed, nearly twice the
amount absorbed in 2013 and the
largest amount since 2007.
n An investor paid $1.58million
for a 30,060-sf industrial building
at 6191 E. 38th Ave. in Denver,
a deal indicative of demand for
space by traditional vs. marijuana
grow companies, said George
Moseley of Sheldon-Gold Realty
Inc.
The property, whose zoning
doesn’t allow marijuana uses,
drew significant activity and eight
offers. The going-in cap rate was
6.45 percent on a below-market
lease with more than three years
remaining, Moseley said.
“It’s a good building. It’s older,
but it’s in good shape, clean envi-
United Properties will deliver the second phase of Enterprise Business Center in late April.