Colorado Real Estate Journal - May 6, 2015
The Hilltop Retail Center in the Glendale/Cherry Creek submarket recently was acquired for $7.05 million. The sale equates to $401 per square foot for the 17,542-sf center built in 2001 at 5075 Leetsdale Drive. The buyer is a limited liability company that incorporated the address into the LLC. The sellers were Hilltop Retail DL LLC and Hilltop Retail KT LLP. The sellers had purchased it in 2006 for $5.1 million, according to public records. The most recent sales price represents a 38.2 percent gain, which outpaced the inflation rate. Adjusted for inflation, the sellers paid $5.94 million for the property, which was 100 percent occupied at the time of sale. Both the buyer and seller were in a 1031 exchange. “This was an off-market deal,” said Troy Meyer, who represented the seller with fellow Sperry Van Ness team members Kevin Matthews and Dean Corey. Nezar Aweida of Re/Max Leaders represented the buyer. “This was a transaction that really made sense for both sides,” Meyer said. “The buyer had sold a shopping center in Colorado Springs and wanted to exchange into a retail center in Denver, closer to home,” Meyer said. The sellers were trading into an apartment building, he said. “The seller[s] [were] in the process of buying the apartment building, so [were] motivated to complete the sale,” in the time frame required to defer taxes on the capital gains through the 1031 exchange, he said. Because both parties were involved in a 1031 exchange, they didn’t take it to the open market, Matthews said. “I do think we would have had a lot of interest from buyers, if we had, because of the location,” Matthews said. “It is close to the Glendale and the Hilltop neighborhoods and is right across the street from that King Soopers, which is always busy. It is the King Soopers with its liquor license,” Matthews said. He said the sales price of Hilltop Retail Center was reflective of the market. “It was good for the buyer and good for the seller,” Matthews said. “It was the market price,” he said. “There is a lot of traffic in the area and there are some real barriers to entry,” because most of the land along Leetsdale has been developed, he said.
The property was 100 percent leased at the time of the sale. Tenants include Peepers Optical, Darque Tan, Papou’s Pizzeria and Salon Centric. “I don’t think they would have any trouble backfilling any of the space, if any of the tenants left,” Matthews said. Properties along South Colorado Boulevard sell for even more, because they command higher rents, he said. Also, the investor appetite for smaller, infill centers is growing, he said. “I think investors still prefer grocery-anchored centers, but these strip centers in urban locations with high traffic and a good tenant mix are really becoming popular with investors,” Matthews said. The Hilltop Center also includes a basement that is currently used for storage. The buyer calculated the purchase price using only the above-grade space. “The basement is basically the same footprint (as the storefronts), so they have more 17,000 square feet below ground,” Matthews said. “Basement space is kind of difficult to lease,” Matthews said. “But if they can find a use for that basement space, it’s just icing on the cake for an already great center at a great location. If they can lease that basement space, it would be an added bonus.”
-Teller Street Kitchen leased 6,226 square feet at 464 S. Teller St. in Belmar in Lakewood. Robb Brown of the Denver Retail Group represented the tenant in the transaction. The listing firm was GF Properties Group, a wholly owned subsidiary of the Southern Ute Indian Tribe Growth Fund.