October 21-November 3, 2015 —
COLORADO REAL ESTATE JOURNAL
— Page 43
In 2010, during the Great
Recession, “We recapitalized in
the context of the post-credit cri-
sis and GF Properties became the
majority owner,” he said.
“It was a complicated owner-
ship structure,” Falcone said. “
“We had 50 percent of one part
and 10 percent of another fund
and so we were about a 25 per-
cent owner, maybe a bit less,”
he said.
It was GF Propertiesʼ decision
to sell.
“But we did not disagree with
the decision,” Falcone said. “It
was the right time to sell and take
advantage of market conditions.”
Last spring, GF Properties
hired the CBRE investment team
of Mike Winn, Tim Richey and
Brad Lyons to market Belmar
and in June it went under con-
tract to Starwood Capital Group.
Starwood, which manages
more than $45 billion in assets,
closed on the deal in late Sep-
tember.
“Winn and Richey really
understood the public financ-
ing aspect of Belmar,” said Pat
Vaughn, president and chief
operating office of the GF Real
Estate Group.
CBRE’s research showed that
the household income within a
1-mile radius of Belmar is $62,556
and within 3 miles it is $68,389.
Some 73,000 vehicles pass Bel-
mar daily on Wadsworth Boule-
vard and 37,000 pass it on Alam-
eda.
“The deal was underwritten
with a 10-year hold period, and
we were involved with it for nine
years,” Vaughn said.
“The market conditions were
so strong and Denver is an espe-
cially high-profile market, we felt
it was the right time to put a truly
unique property on the market,”
Vaughn said.
The 1.1 million-square-foot Bel-
mar includes:
• Retail: 871,000 sf of that is
96 percent leased to tenants that
include Whole Foods, Dick’s
Sporting Goods, Best Buy, Nord-
strom Rack, 24-Hour Fitness and
a 16-screen Century Theatre;
• 282,000 sf of Class A office
space that is 100 percent leased;
and
• 171 Class A apartment units
that are 97 percent leased.
Vaughn sold Belmar not only
because of market conditions, but
also because he wanted to diver-
sify its real estate holdings by
geography, so the risk wouldn’t
be overweighted to one part of
the country.
“With Belmar, probably 50 per-
cent of our holdings were in the
Denver area and without Bel-
mar, it is probably 20 percent,”
Vaughn said.
GF owned 100 percent of the
apartment units, 90 percent of
the rest of Belmar and Continu-
um was a 50 percent partner in
the public financing portion of
it, he explained.
Despite the big sales num-
ber, the return on its investment
wasn’t huge, he said.
“Belmar gave us a satisfactory
return,” Vaughn said.
“We weathered the Great
Recession, but again, it wasn’t
a great return. We made a nice,
nominal dollar profit, but we did
buy into it in 2006 and again in
2009-2010, which was not a good
time in the market. But it did
recover nicely.”
Belmar almost certainly would
have gone back to lenders if not
for the Southern Ute tribe, he
said.
“I think the Southern Ute Indi-
an tribe really helped Belmar
during a really rugged time,”
Vaughn said.
“We came to the rescue,”
Vaughn said. “It very likely
would have gone into bankrupt-
cy if we had not stood by them.
But that is just how the tribe is.
It actually is very refreshing that
we truly take a long-term view
and will not just walk away.”
The tribe also kept the Spire
office condo tower out of bank-
ruptcy, by investing in it during
the recession, he noted.
Vaughn said there was quite a
bit of institutional interest from
prospective buyers.
Both he and Falcone noted that
mixed-use properties such as Bel-
mar rarely hit the market, not
only in the Denver area, but also
anywhere in the U.S.
Scott Wolstein, CEO of Star-
wood Retail Partners, said he is
thrilled by the purchase.
“We think it represents a great
opportunity and that better days
are ahead of it,” Wolstein said.
The demographics are great,
he said.
“We love Denver. We love the
direction Denver and the sur-
rounding area is going in,” Wol-
stein said.
The purchase represents Star-
wood Capital’s biggest invest-
ment ever in Colorado.
“It is one of the bigger deals in
retail done this year in the coun-
try, I would think,” he added.
“Overall, Belmar is a very
sound investment and is in a
prestigious area in a growing
market.
“Particularly, given our retail
expertise, we think we will be
instrumental in really bringing
Belmar to the next level.”
He said while “I think it is off
to a good start,” as far as its ten-
ant mix, “We can certainly attract
more high-volume restaurants
and I think there is an opportu-
nity to advance its central plaza
and take advantage of its prox-
imity to the movie theater,” he
said.
He plans to bring in some
strong, national players, but
also would love to bring in local
“farm-to-table” restaurants.
“Personally, I always love
to have these regional players
involved in our projects,” Wol-
stein said.
“I think that makes for a ter-
rific, more intimate experience
for consumers. So we will cer-
tainly be looking for those types
of operators to give it a real local
flavor. At the same time, we will
bring in some very productive
chain restaurants.”
Another thing they likely will
do is reduce the size of the Dick’s
Sporting Goods store, allowing
for other users in that building
“Dick’s Sporting Goods took
over the Macy’s building and
that space is much larger than its
prototype,” Wolstein explained.
“We’ll be working with Dick’s
Sporting Goods to bring its size
more in line with its prototype
size and reclaim some of the
space in that building for other
uses,” he said.
Also, they will move some of
the tenants around in Belmar.
He said some of the tenants
are in the wrong part of Bel-
mar, given their uses, and they
will move stronger retailers into
prime space.
He said he would love to make
other investments in the Denver
area.
“If some other retail opportuni-
ties would arise, we would pur-
sue them,” Wolstein said.
But it has to be big.
“We would not be interested in
anything less than $100million in
value,” he said.
Falcone said that every project
he has tackled since Belmar –
including Continuum’s involve-
ment inUnion Station, the former
University of Colorado Health
Sciences Center at East Ninth
Avenue and Colorado Boulevard
and Bradburn in Westminster –
has incorporated lessons learned
from Belmar.
“It is kind of bittersweet,” pass-
ing the baton on Belmar, Falcone
said.
“It was the right time to sell,
and the sale shows it was a great
success, but still, after 15 years,
it’s tough not to be waking up
to Belmar every day,” Falcone
said, while looking at investment
opportunities in Los Angeles.
He said he used to think that
Belmar was the most complex,
development he has ever been
involved with.
“Now, I think that Union Sta-
tion might have knocked Belmar
off its pedestal,” he said.
Still, he would jump at another
opportunity to create something
of the magnitude of Belmar.
“I would love to have the
opportunity to do another Bel-
mar,” Falcone said.
“It was a great project”
s
Belmar
Jim Havey
A number of retailers and restaurants call Belmar home, including Ted’s
Montana Grill.
Jim Havey
Apartments in Belmar have outperformed nearby apartment communities.
Jim Havey
Target is one of the retail anchors at Belmar.
Bachelor of Agricultural Science
from Colorado State University.
In 2014, McNellis earned his
master’s degree in urban design
from the University of Colo-
rado Denver.
s
Cuningham Group Architec-
ture Inc.
named
Thomas Frid-
stein, FAIA, LEED AP,
as chief
operating officer.
The former
director of
development
and execu-
tive director
of Cuning-
ham Group
China, Frid-
stein brings
more than
30 years of
experience in
the development and design
of buildings, urban spaces and
interior environments and the
management of large architec-
tural organizations. Based in
Cuningham Group’s Denver
office, Fridstein now oversees
all of the company’s day-to-
day operations and manages
the firm’s performance.
Fridstein has worked in 26
countries and has completed
signature projects in China,
Europe, South America and
the United States. He previ-
ously managed major archi-
tectural firms, including
leading one of the world’s
largest architectural practices
at AECOM. He has also served
as executive principal at Per-
kins Eastman, CEO of Hillier
Architecture, senior director
of design for international real
estate company Tishman Spey-
er Properties and partner at
Skidmore, Owings & Merrill.
Fridstein also has been the
managing principal respon-
sible for many large-scale,
mixed-use developments,
including the 4 million-square-
foot Broadgate development
in central London, the 88-story
Jin Mao Tower in Shanghai,
the 48-story Bertelsmann
Building in New York’s Times
Square and the $2 billion Baha
Mar resort in the Bahamas.
s
CDE Who’s
Thomas Fridstein
