Colorado Real Estate Journal - October 21, 2015
Older, strip retail centers in the Denver area have become hot investment properties. The latest example of a buyer picking up one of these value-add deals was McCain Properties II LLC. The limited liability company, headed by longtime local real estate investor Doug McCain, recently paid $5 million for the 34,269-square-foot Hillcrest Plaza shopping center in Northglenn. The sales price of the property at 1400-1490 104th Ave. equates to $145.90 per sf. Marc Lippitt, Schott Shwayder and Justin Herman of Unique Properties LLC-TCN Worldwide handled the sale of the property. The seller was R Savageau LP. “It was a family decision to sell it,” Lippitt said. “It had been owned by the same family for probably 25 to 30 years. A number of the family members thought this was a good time to liquidate some of their assets and this was one of them.” They picked a great time to sell, as interest in all kinds of retail properties in the Denver area has never been stronger, Lippitt said. “Denver is so hot right now that anytime anything goes on the market, there are a number of buyers out there waiting to snap it up,” he continued. He said they received multiple offers for Hillcrest Plaza and it went under contract very quickly. “Anything with ‘value-add’ in it is especially sought after,” because investors can typically get a very high return on any improvements to the property, he said. “Doug will probably put a couple of hundred thousand dollars into this property,” said Lippitt, who has been working with him for the past 23 years. “The location is great,” Lippitt said about Hillcrest Plaza. “It is in a very nice part of Northglenn,” he said. The center, he said, “is not in disrepair,” but “it needs some updating and there is room for improvement as far as both the leasing and physical condition. Really, it needs some TLC and Doug has a long history of going in and upgrading and repositioning properties.” A number of the tenants are paying below-market rents, he said, providing an upside to the new owner. “There’s a Budget Car Rental there, but it also has a lot of mom- and-pops,” Lippitt said. Hillcrest Plaza, built in 1973, was 92 percent occupied at the time of sale. It sold for an 8.11 cap rate. Lippitt said he does not see investor interest diminish for these types of neighborhood strip centers. “People are always going to need these kinds of retail centers where you go to get your haircut or have lunch in a Mexican restaurant,” Lippitt said. “Those are the kinds of services you can’t get online.”