Colorado Real Estate Journal - February 18, 2015
Unico Properties became one of the largest owners of office properties along the Front Range with its purchase of a 1.5 million-square-foot portfolio from W.W. Reynolds Cos. The deal included 27 Boulder buildings that reportedly traded for $168.4 million. Along with 20 office, flex and industrial buildings in Fort Collins, which Unico quickly spun off, the deal involved at least $225 million of real estate, according to a knowledgeable source who wasn’t involved in the transaction. “This transaction, at approximately 1.5 million square feet, represents the largest real estate transaction by square footage this cycle, and it elevates Unico’s position in this market as one of the largest office landlords in the Front Range,” said Geoff Baukol, senior vice president of institutional properties at CBRE Capital Markets. “We feel fortunate to have uncovered the opportunity to invest in this extraordinary portfolio,” said Ned Carner, Unico Properties vice president of acquisitions. “This was a very large and complicated transaction that required significant creativity and ingenuity. We’re thrilled to be working with W.W. Reynolds, one of Boulder’s premier real estate companies, and we look forward to a continued partnership with the company as they manage the portfolio for us.” Unico purchased the properties in partnership with AEW Capital Management LP, a global real estate investment adviser. Boulder-based W.W. Reynolds developed the properties over a 15-year period starting in 1985. Company President Bill Reynolds has had discussions with Unico for years and reached out to the company when he decided to sell. “Timing and the strength of the real estate market in Boulder and Fort Collins made this opportunity to sell a portion of my portfolio possible,” he said. “Having personally developed all of the properties included in this sale, it was important to me that my company stay involved going forward. To do this we are partnering with Unico and will continue to manage and lease the properties as we have done since their inception. “Unico has a great reputation and the capital necessary to take these buildings through their next evolution,” said Reynolds, adding his company’s history and knowledge of the Boulder market “will ensure that these properties continue to be contributing assets.” “We intend to invest significant capital into tenant spaces, upgrade the common areas and enhance the amenity base of the parks in order to meet the needs of Boulder’s dynamic creative, technology and office tenants,” said Carner. “By modernizing the buildings, our goal is to help tenants attract and retain top talent and solidify the buildings’ position as Boulder’s premier office parks for its growing creative and tech tenant base.” Boulder properties included in the sale totaled 1.01 million sf. They are: • Pearl East Business Park, a 453,424-sf, 11-building park at Foothills and Pearl parkways. The campus is close to U.S. Highway 36 and Boulder Junction, the city’s new transit village, and was 93 percent leased. • Tierra Business Center, which comprises 205,180 sf in six buildings. The park is within walking/biking distance of downtown Boulder via the Boulder Creek Path. • Flatirons North, a 90 percentleased office campus in Flatiron Park with 168,619 sf in four buildings that cater to tech tenants. • Highpoint Business Park, which consists of 186,220 sf. The park’s six buildings offer unobstructed views of the city and mountains, and upper-level suites have patios. The property is 90 percent leased. Along with 14 buildings Unico Properties already owned on and around the Pearl Street Mall, its Boulder portfolio now spans nearly 1.4 million sf. “Boulder offers a unique blend of strong economic drivers and incredible quality of life. When we uncovered the off-market opportunity to buy a significant institutional-quality portfolio in a market like Boulder with very real supply limitations, a growing dynamic tenant base and ultra-low vacancy numbers, we couldn’t pass it up,” said Austin Kane, vice president and regional director of Unico’s Colorado portfolio. CBRE Capital Markets arranged financing for the Boulder acquisition. “This was a complicated debt assignment that required the potential lenders to offer a high level of flexibility,” said Brady O’Donnell, executive vice president in the firm’s Debt & Structured Finance group. “It is rare that larger suburban office portfolios like this trade in the Boulder market, so we were thrilled with the opportunity to represent Unico Properties and ultimately secured a great life company portfolio loan.” Seattle-based Unico Properties acquired its first Colorado property – the Centerpoint II office building at Interstate 25 and Colorado Boulevard – in 2006 and has amassed a Denver office portfolio of 2 million sf. Its assets include Writer Square on downtown’s 16th Street Mall. The real estate investment and operating company focuses on office and multifamily assets in the Western United States.