Colorado Real Estate Journal - September 2, 2015

New owner has long-term view for CTC

The Colorado Trade Center’s nearly 100-year-old history will continue to be written following the asset’s acquisition by Boulder-based Conscience Bay Co.

Acquisition of the 700,000-square-foot industrial property on 40 acres at Interstates 25 and 70 is a classic “covered land play,” offering strong cash flow for years to come in a prime urban Denver location with long-term redevelopment potential.

No one involved in the transaction would disclose what Conscience Bay paid for the property, but John Winslow of Winslow Property Consultants said the deed shows the price was $42.89 million.

Located at 5151 Bannock St., the trade center is 100 percent occupied by tenants including Safeway, FreshPoint, FreshPack Produce, Condit Exhibits and Colorado Doorways. Lease terms are seven-plus years.

“We really look at this as a good long-term hold. We like the long-term leases with credit tenants, giving us dependable cash flow,” said Ben Woolf, Conscience Bay Co. director of investments.

“There is a lot of exciting growth happening in Denver, and much of this growth is moving in the direction of the trade center. Considering its phenomenal location and great highway access to both I-25 and I-70, we believe that the project offers opportunities for additional development and a wide range of commercial and industrial uses.” “This was an exciting sale to be part of. The trade center is one of those notable properties that most people in Denver know and recognize.

The seller (Bannock Street Center LP) is a longtime friend and client of our firm, and we are excited to have found a great buyer who has big plans for the future of the asset,” said DTZ investment broker R.C. Myles. Myles and DTZ’s Jim Brady, along with DTZ industrial advisers Craig Myles and Tyler Smith, handled the sale.

The seller had owned the property since 1985 and completed extensive renovations.

The Colorado Trade Center is integral to Denver’s development. In 1922, the Chicago Burlington and Quincy Railroad built a major facility for steam locomotive repairs on the site that, at the time, encompassed nearly 300 acres. “It was big news for Denver to land that facility. It really put Denver on the map,” said R.C. Myles.

The locomotive shops operated through the Depression as well as the railroad industry’s conversion to diesel engines. They were shut down in 1953.

Associated Grocers of Colorado bought most of the property a few years later, adding buildings and converting a portion of the property to cold storage for food and produce distribution – uses that continue today.

Much of the produce consumed in metro Denver travels through the trade center on its way to grocery stores and restaurants.

Over the years, the property has housed tenants including Miller-Coors, Nestle Purina, Owens Corning and Nash Finch.

The trade center was offered to a handpicked group of investors, according to Myles.

“The majority of all the buyers we went to ended up making offers on it, and there were several that were very aggressive about wanting it,” he said.

It’s rare for a large, quality industrial investment property so close to downtown to come on the market, Myles noted.

“It’s 40 acres of infill in the central market in Denver. It doesn’t happen every day.” “It was amazing, all of the interest we had,” said Smith.

The Colorado Trade Center is one of the largest industrial-zoned properties in Denver County, he said. It’s stabilized with long-term leases in place, but also offers future upside in rents. Plus, “There are pockets of yard space that are on month-to-month leases that could be repurposed now,” he said, adding the coal plant on site also could be repurposed.

Smith and Craig Myles will continue to handle leasing.

Conscience Bay Co. invests in “unique” real estate assets that generate dependable income and long-term capital appreciation. It owns office and industrial properties, as well as land, in Boulder. The Colorado Trade Center is its first Denver asset, and it is interested in acquiring more.

“At CBC, we focus on great pieces of real estate with significant cash flow, good credit tenants and irreplaceable locations. CTC has all of these attributes and more,” said Woolf.

“We are excited to acquire our first Denver asset and look forward to being a part of the North Denver community.”