Colorado Real Estate Journal - January 21, 2015
More than a million square feet of industrial real estate in Denver changed hands as part of Colony Financial Inc.’s acquisition of Cobalt Capital Partners. The $1.6 billion transaction included 256 primarily light industrial assets comprising more than 30 million sf across 16 major U.S. markets. There were eight Denver assets totaling 1.13 million sf, according to CBRE Executive Vice President Jim Bolt, who handled the local properties. Bolt said there was considerable national and international interest in Cobalt’s portfolio. “Cobalt is a highly coveted portfolio of strategically located assets in high-growth markets, well positioned to benefit from a strengthening economy in the next phase of the business cycle. Moreover, it features strong rental rates and a well-diversified tenants base, underscored by low capital requirements,” Thomas J. Barrack jr., executive chairman of Colony Financial, said in announcement prior to closing. Lewis D. Friedland, who led Cobalt’s management team, will run day-to-day operations of the business, including acquisitions, and asset and property management. “We are pleased to have executed this sale on behalf of our investor partners, including our longtime partner USAA Real Estate Co. Our entire team has done an excellent job over the last 10 years building this business into a leader in the industrial sector. We’re excited to be joining Colony, one of the real estate industry’s premier companies, and look forward to continuing to grow our portfolio,” Friedland said. All the Denver assets were fully leased. Among them, according to a partial list compiled from public records by John Winslow of WinComps LLC, were: • 445 W. 53rd Place, Denver, 201,500 sf on 11.41 acres, $10.09 million • 14303 E. Moncrieff Place, Aurora, 163,072 sf on 7.3 acres, $8.44 million • 1550 W. Evans Ave., Denver, 76,728 sf on 4.03 acres, $4.72 million • 11175 E. 55th Ave., Denver, 235,024 sf on 11.3 acres, $14.29 million • 11600-11610 E. 51st Ave., Denver, 86,820 sf on 3.96 acres, $4.68 million • 11605 E. 55th Ave., Denver, 99,846 on 6.1 acres, $7 million • 4865 Moline St., Denver, 98,304 sf on 6.1 acres, $5.35 million The buildings were constructed from 1972 to 2008. The entire portfolio, with major concentrations in Atlanta, Dallas and Chicago, is leased to more than 600 tenants. GE Capital Real Estate arranged financing equal to approximately 70 percent of the purchase price, with the balance of initial capital funded through equity. The portfolio is expected to achieve a stabilized unlevered net operating income yield of approximately l7 percent and produce an initial annualized return on equity of approximately 10 percent. “We believe this portfolio will generate very attractive risk adjusted returns which we will seek to aggressively enhance through additional acquisitions,” said Barrack. Cobalt was represented in the transaction by an Eastdil Secured team led by Steve Silk and Jay Borzi, the CBRE National Partners team led by Jack Fraker and Chris Riley, and Gannon Gerrity Advisors, led by Kristin Gannon and Kevin Gerrity. Locke Lorke Lord served as cobalt's legal adviser.