July 15-August 4, 2015 —
COLORADO REAL ESTATE JOURNAL
— Page 15
Colorado Springs/So. Front Range
by Jennifer Hayes
A retail center at one of the
best locations in Pueblo sold at
a price of $407 per square foot.
A Northern Colorado-based
private investor paid $3 million
for the three-tenant retail center
at 1425 U.S. Highway 50 West
– a center that essentially func-
tions as a net-leased asset.
McAlister’s Deli, Papa John’s
Pizza and Open MRI of Pueblo
occupy the 7,371-sf center, shad-
ow anchored by Lowe’s and
Staples, where McAlister’s Deli
is the primary tenant.
Upon close of the property, the
McAlister’s Deli franchisee, the
seller, agreed to enter into a new
15-year, triple-net master lease
of the property, noted Drew
Isaac of Marcus & Millichap.
“There were a number of
offers on the building. The value
and interest
in the prop-
erty is due
to its func-
tioning as a
n e t - l e a s e d
property,” he
added.
The
new
owner also
will
enjoy
a 1.5 per-
cent annual rental escala-
tion throughout the primary
term and two 10-year renewal
options.
“The buyer obtained a stable,
long-term, net-leased income
stream collateralized by a prop-
erty in one of the best retail loca-
tions in Pueblo,” added Howard
Stark of Marcus & Millichap,
who represented the buyer with
Isaac.
The seller, who was represent-
ed by Barry Higgins and David
Lee, also out of the Denver
office of Marcus & Millichap, is
expanding his McAlister’s Deli
footprint in several markets and
the transaction allowed him to
redeploy capital to achieve that
goal.
The Pueblo location for the
franchisee is one of the best-
performing McAlister’s in the
state, noted Isaac.
The center was constructed
in 1998.
Other News
n
The Gazette
recently leased
42,500 square feet of industrial
space in Colorado Springs.
It leased the warehouse prop-
erty at 3113 N. Stone Ave. from
Full Circle V LLC.
Aaron Horn
and
Dave Bacon
of
Colorado Springs Commer-
cial, a Cushman & Wakefield
Alliance
represented the tenant.
The firm also represented the
landlord in a lease renewal in
the city.
Mike Helwege
and
Peter
Scoville
of Colorado Springs
Commercial represented
Ridge-
line Drive TIC
in
Wesco Dis-
tribution’s
renewal of 39,194
sf of space at 116k75 Ridgeline
Drive.
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McAlister’s Deli is the primary tenant at the three-tenant retail center
on U.S. Highway 50 West.
Drew Isaac
Porter + Bugusky, Qualcomm,
Lockheed Martin, Celestial Sea-
sonings and others.
Other News
n
The Village at the Peaks in
Longmont is 80 percent leased,
with four additional restaurants
coming.
Tenants include
Culver’s, Jersey
Mike’s, Pie Five Pizza
and
Village
Inn.
“With the signingof these leases,
we are now more than 80 percent
leased, which is 10 percent greater
than we projected for this point
in time,” said
Allen Ginsborg,
managing director and principal
of
NewMark Merrill Mountain
States,
which is developing the
shopping, dining and entertain-
ment center in cooperation with
the
city of Longmont.
The Village at the Peaks will
begin opening in stages this fall.
Whole Foods took possession of
its space June 30 and is beginning
its build-out.
The Village will host a Back-
to-School Block Party and prop-
erty preview, which will include
guided tours of construction
progress, giveaways, music, res-
taurant samplings and more, Sat-
urday, Aug. 22, from 10 a.m. to
2 p.m. The center is located at
South Hover Road and Ken Pratt
Boulevard.
s
appealing to buyers – as was
the building’s interstate location.
“It’s a fairly visible and promi-
nent building right on the high-
way,” Hashimoto said.
The property received inter-
est from both local and regional
investors, he said.
The Forum has undergone
common-area upgrades, and
Koncilja said Richardson Realty
will upgrade the HVAC and
other systems, as well as the
lobby. “It’s a pretty substantial
investment,” he said.
Other News
n
City Office REIT Inc.
has
closed on the $35 million
acquisition of DTC Crossroads
a 191,402-square-foot Class A
office building in the Denver
Tech Center.
The six-story building at 7595
E. Technology Way was 91
percent occupied.
LBA Realty
was the seller.
CBRE’s Geoff
Baukol, Mike Winn
and
Tim
Richey
were the listing brokers.
“We are very pleased with
the DTC Crossroads acquisi-
tion,” City Office REIT Presi-
dent and Chief Operating Offi-
cer
Greg Tylee
said in a release.
“Crossroads is one of the top
buildings in the DTC submar-
ket, acquired at a compelling
yield and cost base. Denver is
one of our leading target mar-
kets, and we have achieved
market scale with well-located
assets across Denver’s stron-
gest submarkets.
City Office REIT also recent-
ly acquired Superior Pointe, a
two-building, 149,006-sf Class
A office property in Superior. It
bought the asset from Sequoia
Properties LLLP for $25.8 mil-
lion. Baukol was the listing
broker.
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lease rates,” Sands said.
“We know what is going on
in the current market in Jeffer-
son Park and we are not con-
cerned about overbuilding,”
Sands said. “Everything being
built is getting absorbed very
quickly. Demand seems to be
outstripping the supply.”
Jefferson Park is considered
by many to be a hidden, or
not so hidden, gem of a neigh-
borhood in northwest Denver.
West Colfax Avenue, Speer
Boulevard, the Platte River and
Federal Boulevard border it.
The developer of Decatur
Point is Riverpoint Partners,
headed by Reid Davis.
“This is his first project in
Denver,” Sands said.
“Obviously, this is First-
Bank’s first transaction with
him. We were very impressed
by him. He comes from a real
estate family in North Carolina.
This will be a very high-quality
development. His family has
a lot of experience in develop-
ment back East.”
Indeed, Davis’s father, Craig,
is an investor in Decatur Point.
“My dad has been a mentor
of mine,” Reid Davis said. “He
has many, many years’ experi-
ence in real estate back East.
I’ve learned a lot from him. I’m
very fortunate to have a great
mentor with my father.”
Davis came to Denver seven
years ago to get his real estate
degree from the University of
Denver. Because the real estate
market was soft when he grad-
uated, he stayed to earn his
MBA.
Before launching his own
company, he worked for CBRE
as a financial analyst for the
capital markets group’s health
care division.
“I didn’t want to spend all of
my time behind a desk,” look-
ing at a computer screen, so
he launched his development
company almost three years
ago.
He found the Jefferson Park
land about two years ago and
expanded the site by purchas-
ing an adjoining parcel with an
old warehouse, which he razed.
A portion of the 1.33-acre site
extends to West 28th Avenue.
Davis, with his wife and two
small children, knows Jefferson
Park very well.
“We live in Jefferson Park,”
Davis said.
He understand that a number
of residents in his neighbor-
hood are alarmed by the rate of
development in Jefferson Park
and other infill neighborhoods
of Denver.
In fact, Rafael Espinoza won
a landside victory against
incumbent City Councilperson
Susan Shepherd on a campaign
centered on what he and oth-
ers considered out-of-control
growth.
“I have lived in District 1’s
Jefferson Park neighborhood for
over a decade and have seen it
rapidly expand with and with-
out regard for the character that
makes our neighborhoods so
highly sought after,” Espinoza
said on his website, when run-
ning for City Council.
Davis, however, said he
believes Decatur Point, at West
27th Avenue and Decatur Street,
will fit well into Jefferson Park
and will prove to be an asset and
a good neighbor.
“It’s really a great location,”
Davis said. “We’re two blocks
off Speer, so you don’t get the
noise you would have if you
were right on Speer.”
Craine Architecture is design-
ing Decatur Point.
“It will be built to LEED stan-
dards, but we will not be LEED
certified,” Davis said.
He said the deal is being
underwritten “very conserva-
tively” at $2 per square foot,
which is about the market rate
for new apartment units in Jef-
ferson Park.
“Hopefully, when we open,
we will be able to get $2.30 per
square foot,” he said.
The average unit size will be
770 sf. He plans to open the first
week of July 2016, with the pos-
sibility that some of the units
will open even earlier.
“We will have a pretty decent
mix of studios, one-bedrooms,
one-bedrooms plus a den and
two-bedroom, two-bathroom
units,” Davis said.
“We also will have 11 walk-
up/townhome-style units,” he
said.
Decatur Point, he believes,
will appeal to young profes-
sionals who work downtown,
but don’t want to pay, or can’t
afford to pay, downtown rents.
Many new apartments in areas
around Union Station and in
LoHi are charging, and getting,
rents north of $3 per sf.
“It might take some educa-
tion” about just how close Jef-
ferson Park is to downtown,
Davis said.
He noted that he and his wife,
on weekends, often will put
their two children in strollers
and walk to LoDo in about 15
minutes.
Davis said he reached out to
Sands at FirstBank, the larg-
est locally and privately owned
bank in Colorado, when he first
learned of the Jefferson Park
property two years ago.
“Luckily, Adam has been
very patient and has stuck with
us the entire time,” Davis said.
“I’m glad he did. We are very
excited about Decatur Point.”
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‘Everything
being built is
getting absorbed
very quickly.
Demand
seems to be
outstripping the
supply.’
– Adam Sands, FirstBank
