Page 46 —
COLORADO REAL ESTATE JOURNAL
— August 5-August 18, 2015
PROPERTY AVAILABLE
For Sale
For Lease
Wanted
office • industrial • retail • multifamily • land • medical office • hospitality • restaurants • senior housing & care
And as Sidell and the Gart fam-
ily members predicted, the Pavil-
ions did roar back.
The Pavilions was home to the
last NikeTown built in the nation
and had been one of the original
tenants.
NikeTown told them it planned
to leave the 30,000-sf space, but
gave the Gart family time to find
a replacement.
It did, with the first H&M store
in the Denver area. H&M ini-
tially took about 20,000 sf, but has
been so successful that it is taking
the remaining NikeTown space,
Sidell said.
Forever 21 showed its faith in
the Denver Pavilions by expand-
ing into 32,000 sf from 7,600 sf.
In April, Gart Properties
announced that the first Uniqlo,
a popular global clothing retailer,
this summer will take more than
22,000 sf along the 16th Street
Mall in the Pavilions. It will be the
first Uniqlo in the Rocky Moun-
tain region.
Regal Cinemas has invested
about $1.7 million upgrading its
seats in the United Artists Den-
ver Pavilions Stadium 15 movie
theater.
When Clarion invested in the
Pavilions in 2008, it was through
a value-add fund. The holding
period for the assets in the fund
was to be five to seven years,
Sidell said.
Because they knew that the sev-
en-year deadline was approach-
ing, they hiredMary Sullivan and
John Jugl of Holliday Fenoglio
Fowler to find a replacement for
Clarion’s equity portion.
“Mary first put us in touchwith
Clarion, then called ING, with our
Village Boulder Shopping Center
in 2003,” Sidell said.
“Later, when we were looking
for a another 80 percent part-
ner in four shopping centers we
owned, Mary analyzed the deal
and said we would be better off
refinancing the debt, even though
it would have been in her best
interest for us to sell most of it,”
Sidell said.
Sullivan and Jugl did not shop
the deal to the entire market.
“They took a rifle approach and
not a shotgun approach; it was
very targeted as far as shopping it
to a very few qualified investors,”
Sidell said.
While Clarion invested in the
Pavilions in a value-add fund,
Met Life invested in it from a core
fund for stabilized properties.
Those types of funds often hold
the investment forever, Sidell said.
“They typically say for at least a
10-year hold period, because you
can’t make it open-ended, and
nobody will ever go beyond 10
years,” Sidell said.
At the same time, Eric Tupler of
HFF found a replacement for the
debt on the Pavilions.
Sidell declined to say how
much the debt portion was, but
records show that Tom Gart
signed a 10-year note for $85
million with the Massachusetts
Mutual Life Insurance Co. The
$85 million loan replaces debt
from FirstBank.
Through the process, the Gart
family never considered selling
its stake in the Pavilions, Sidell
said.
“That was never even a dis-
cussion,” Sidell said.
In fact, the Gart family ties to
the 16th Street Mall stretch back
far longer than its purchase of
the Denver Pavilions.
Nate Gart was amember of the
original committee that helped
create the 16th Street Mall.
“It’s an honor to be part of the
third generation of Gart busi-
nessmen who are having a sig-
nificant impact on Denver and
our fine state,” Tom Gart noted.
The Gart family continues to
have a great relationship with
Clarion and expects to build a
similar long-term relationship
with Met Life, Sidell said.
And it worked out for all par-
ties that during the dark days of
the economy Clarion was will-
ing to invest more money in
the Pavilions, instead of walking
away, as so many others were
doing at the time.
“They were rewarded hand-
somely by doubling down on
their initial investment at the
Pavilions.”
“Nate was right. Nothin’ hap-
pens if you don’t do nothin’.”
s
Union Station.
Completed in 2014, the four-
story building has a mix of stu-
dio, one- and two-bedroom apart-
ments averaging 916 sf each.
The 96-percent-leased commu-
nity includes amenities such as a
resort-style swimming pool with
a hot tub, poolside bar, 15,000-
sf landscaped courtyard with fire
pits and pingpong, barbecue area,
dog spa with enclosed dog park,
state-of-the-art clubhouse, fitness
center, community kitchen, pool
tables, lounge and business center.
“Both, in my opinion, are very
well located and are true Class A
projects,” Simon said. “And Block
32 will benefit because Denver
plans a $49 million improvement
plan along Brighton Boulevard.”
Interestingly, as a government
agency, Fannie Mae is not as inter-
ested in the fundamentals of a
market-rate property as are the
private life insurance companies,
Simon said.
The location, quality and ame-
nities are much more important
to a life insurance company than
those factors are to Fannie Mae
and other government agencies,
he said.
“FannieMae is designated to do
all quality types of loans for apart-
ment, from affordable, workforce
housing to student housing and
market-rate housing,” Simon said.
While Fannie Mae provides a
“wide gamut” of financing pro-
grams andoptions, in today’smar-
ket, rates typically are lower for
affordable and workforce housing
than for newer, market-rate apart-
ment communities, he said.
Indeed, the financing for these
two communities would be more
expensive today.
“It would probably cost 40more
basis points today,” he said.
The borrower, he said, is thrilled.
“To have 20-year financing
below 4 percent is pretty great,”
Simon said.
Other News
n
Boulder-based
Loftus Devel-
opment
obtained $19.4 million
in construction financing for its
planned 111-unit, three-building,
three-story apartment building at
707 S. Boulder Road in Louisville.
Gordon Mickelson,
senior
director,
Dale Stewart,
vice
president, and
Mark Lindgren,
investment analyst for the Denver
office of NorthMarq, arranged the
financing on behalf of Loftus, a
longtime NorthMarq client.
The apartment community Lof-
tus plans will include a clubhouse
with business and fitness centers
and a pool. Other features will
include 9-foot ceilings, washers
and dryers, granite countertops
and ceramic tile bathrooms.
n
Greg Benjamin,
a senior vice
president, and
Jeff DeHarty,
an
associate producer for the Den-
ver office of
NorthMarq Capital,
recently arranged $29.25million in
financing for a 402-unit apartment
community in Odessa, Texas.
They arranged the financing for
the borrower, a division of Wei-
dner Investment Services Inc.
s
‘They were
rewarded
handsomely
by doubling
down on
their initial
investment at
the Pavilions.’
– Mark Sidell, Gart Properties
