Colorado Real Estate Journal - May 1, 2019
A Denver retail center in the spotlight has a new owner and a new sense of stability. BPI Inc. paid $24.2 million for the Happy Canyon Shoppes at the southeast corner of East Hampden Avenue and Happy Canyon Road, at 4820, 4992, 4996 and 5074 E. Hampden Ave. The sale included 70,677 square feet of retail space, which is 95 percent leased to tenants that include Starbucks, Dunkin Donuts, Orange Theory Fitness, Mathnasium, Blo Blow Dry Bar, Corepower Yoga and Massage Luxe. The 7-Eleven pad site and vacant Safeway were not included in the transaction. The seller was Harvey Sender, receiver of the Gary Dragul Receivership Estate for HC Shoppes 18 A LLC. Dragul of GDA Real Estate Services LLC, who previously owned the property, was indicted on securities fraud. “The sale proceeds will go toward the receivership estate and help pay back some investor claimants,” explained Cory Gross vice president of investments, director, of the National Retail Group of Marcus & Millichap. Gross and Jake Shirek an associate for the National Retail Group of Marcus & Millichap, represented the seller and sourced the buyer. “The Dragul case has been in the spotlight for a long time now and I think the tenants of the center will be happy to know that the property is in stable hands now,” continued Gross. “The new owner lives within the community, a stone’s throw from the property, and will hold this asset for the long term. The new owner is heavily invested in the property to ensure that it is positioned to succeed at a high level for years to come.” The highly publicized ownership status didn’t detract from interest in the asset, however. “In the current retail environment, which has faced its fair share of headwinds and negative headlines of the much-hyped ‘retail apocalypse,’ we received extremely strong interest from a wide range of investors around the country,” said Gross. “We received 10-plus offers in the short period of time that is was on the market. Because it was a receivership sale subject to overbid, we had an inperson auction between the highest bidders on the property, which sparked a literal bidding war. This sale highlights the abundance of capital still aggressively targeting pride of ownership, trophy properties in dense, infill Denver neighborhoods.” The new ownership plans to lease up the vacant suites at the center and likely will redevelop the former Burger King pad site. It will manage Happy Canyon Shoppes in house. Built in phases from 1961 to 2015, Happy Canyon Shoppes sees a traffic count exceeding 50,000 vehicles a day along Hampden, has a residential population base of more than 370,000 within a 5-mile radius and the average household income in the adjacent Cherry Hills Village neighborhood is $224,125. Plans for the Safeway include its redevelopment into a food hall, anchored by Tony’s Meats and Market, with additional tenants. “This was a particularly tricky transaction from start to finish. Beyond being a high-profile property with a lot of uncertainty surrounding the redevelopment of the old Safeway building, there were a lot of obstacles to overcome. From selecting a buyer, and subsequently going through a live auction process, to working through court approval and various legal hurdles, this transaction provided unique challenges throughout,” added Shirek. Gross and Shirek are marketing all of the commercial properties of the GDA receivership. Other Colorado properties within the Dragul receivership portfolio include: Summit Marketplace, a 14,000-sf, King Soopers shadow anchored center in Lafayette; the Ash & Bellaire (at Warren) Townhome Development Site, six single-family homes that comprise approximately 1 acre of land proposed for the development of 27 townhomes; a former 4,800-sf Village Inn at the Arapahoe Village Shopping Center in Centennial; an approximately 135,000-sf shopping center in Clearwater, Florida; and Hickory Corners, an approximately 180,000-sf shopping center in Hickory, North Carolina. Other News Harkins Theatres recently announced plans to open in Northglenn. The Scottsdale, Arizona-based company will build a 12-screen luxury theater at Interstate 25 and 104th Avenue, its fourth Harkins in Colorado. While a groundbreaking date has yet to be finalized, Harkins anticipates the new theater will open in late 2020. The theater will include lounger seats; reserved seats in all auditoriums; paperless, mobile ticketing; in-lobby bar; and wall-to-wall curved screens. “Thanks to our loyal moviegoers and community support for our Northfield and Arvada theaters, we have experienced great success in the Denver market,” said Mike Bowers, president and CEO of Harkins Theatres. “We have been looking for the right opportunity to continue to grow in Denver and identified Northglenn as an underserved movie-going community. That factor and its synergy with our other theaters made Northglenn Marketplace the perfect location for our next Colorado theater.” Riverwalk at Castle Rock, a $63 million mixed-use development in Castle Rock, announced the first retailers to join the development. The project includes 230 residential units and 15,000 square feet of ground-level retail space as well as 34,000 sf of office space. Retailers joining the project include family owned Glacier Ice Cream and Great Divide Brewery & Roadhouse. “It’s very exciting to welcome our very first residents, along with an ice-cream shop, and restaurant and brewery,” said Tony De Simone, principal of Confluence Cos., which is developing the project along Wilcox Street. “Castle Rock is a growing community that is rapidly becoming a great destination for people who want to live, work and dine in this part of Colorado. We’re proud to be contributing another special component to the vibrancy of downtown Castle Rock and the community as a whole.” Glacier Ice Cream is owned and operated by the Berberich family, a mom-and-pop-and-daughter shop that was established based on their love of ice cream. It recently opened in 1,417 sf. The Great Divide Brewery & Roadhouse will open in 8,000 sf in October. Its space will include 16 beer taps and a full menu. Navpoint Real Estate handled the leasing for Confluence.