Colorado Real Estate Journal - June 17, 2015
Retail centers anchored by a King Soopers or a Safeway are highly sought-after and command a premium from investors. However, in many cases, the grocer owns the real estate in the center, so they are not included in the sale. In one recent case, an investor did buy a center anchored by a Safeway, which was owned by the center’s owner, Denverbased Etkin Johnson Real Estate Partners. However, last month it was announced that the Safeway in the Summer Valley Shopping Center at the northeast corner of Quincy Avenue and South Buckley Road would be one of nine in the Denver area that will be closed. The 53,426-square-foot Safeway will close in November, said JLL broker Jason Schmidt, who sold the center with partner Patrick Devereaux. The buyer was Dallas-based Leon Capital Group, which paid $10.6 million for the 99,335-sf property on 9.53 acres at 16911- 16981 E. Quincy Ave. The possibility of the Safeway closing was known at the time of the sale, Schmidt said. That impacted the price, but Etkin Johnson, which bought the property more than two decades ago, still doubled the $5.5 million it paid for Summer Valley in 1993. Leon Capital paid $100.67 per sf for the center, built between 1982 and 1983, while Etkin Johnson had paid $55.37 per sf. It sold for a 7.82 cap, while centers that include the grocer anchor have been selling for 5 and 6 caps, Schmidt said. Still, there was a lot of interest in Summer Valley from prospective buyers, Schmidt said. “We had multiple offers,” Schmidt said. “It is really good real estate. It is at one of the strongest intersections in Aurora. And it is very close to a King Soopers, Target and other retailers.” Even though the Safeway in the site takes up more than half of the space at Summer Valley, Schmidt doesn’t think Leon Capital will have much trouble backfilling the space. “If you go out to a three-mile radius, the average household income is $86,000, which is pretty strong for southeast Aurora,” Schmidt said. Etkin Johnson initially marketed the property for sale in 2007. However, a former dry-cleaning operation on the site contaminated the land underneath Summer Valley. Etkin Johnson hired Terracon Consulting Engineers and Scientists to clean up the site. The Colorado Department of Public Health and Environment last fall gave it a clean bill of health. “Summer Valley Shopping Center was a long and successful holding for Etkin Johnson and its investors,” said Barbara Grogan, executive vice president for the company. “Our focus on best-in-class management, preventive maintenance and responsive service allowed us to retain the asset in excellent condition for 22 years, making it an exceptional investment opportunity for a qualified group.” Etkin Johnson will invest the proceeds in other asset classes. “This sale will allow us to continue to focus on our office/ flex and industrial product which is the core of our portfolio,” Grogan said.
-A limited liability company, 4100 South Bellaire, paid $8.75 million for a 23,939-square-foot building at 4100 E. Mexico Ave., in Denver, anchored by a DSW. That equates to about $362 per sf. The brokers in the transaction were Ryan Higgins of AIC Commercial Real Estate LLC and Mark Ernster of SullivanHayes. n An unidentified buyer from Arizona paid $6.15 million, or $150.82 per sf, for the 40,778-sf Lake Plaza retail center at 9000- 9180 W. 88th Ave. in Arvada. There were multiple offers for the property, which sold for 96 percent of the list price. The property was 92 percent occupied at the time of sale and has rents below the market. Rob Edwards and Tom Ethington, both senior advisers and Pinnacle Real Estate Advisors LLC, represented the local seller. Pete Foster, also a senior adviser at Pinnacle, represented the buyer. “We were able to increase the seller’s net proceeds by $388,000,” Edwards said. “The seller received an unsolicited offer prior to listing the property and our effective marketing was able to meet our client’s expectations," he added. He said he isn’t surprised that the property received numerous offers. “The Denver metro (area) is experiencing strong rent growth and the opportunity to acquire a value-add play drew interest from many investors across the U.S.,” Edwards said. “There is a lot of demand for these types of deals,” he said.