Colorado Real Estate Journal - December 2, 2015
A Greenwood Village-based buyer continues to grow its Colorado Springs portfolio, most recently with the purchase of a pair of properties for $23.6 million. Vukota Capital Management paid $18.35 million for the 312- unit Residence at Austin Bluffs and $5.25 million for the 92-unit Chestnut Springs. Both Residence at Austin Bluffs and Chestnut Springs combine historically high occupancies, 94 percent and 96 percent, respectively, over the past 12 months with convenient locations and recent capital improvements, noted CBRE Group Inc. “This transaction demonstrates the value of wisely investing in strategic assets in a growing market like Colorado Springs,” said Jake Young, senior associate, CBRE. “The capital improvements made to date have helped ensure consistent tenant demand over time and the opportunity for additional renovations combined with rent growth sets the stage for promising yields for the new owner.” Young, along with CBRE’s Dan Woodward, Dave Potarf and Matt Burnett, all of CBRE’s Denver Multifamily Investment Properties group, represented the seller, The Lighthouse Group of Pacific Palisades, California. The seller had owned and managed both properties for more than six years and invested in “significant” capital improvements, including more than $2.5 million in Residence at Austin Bluffs and more than $650,000 at Chestnut Springs. The upgrades included updated appliances, countertops, lighting, flooring and hardware; new HVAC systems; upgrades to exterior doors, windows, gates, railings and electrical; and pool, roof and pavement improvements. The Residence at Austin Bluffs, constructed in 1971, is located at 4110-4380 Morning Sun Ave., at the intersection of Academy Boulevard and Austin Bluffs Parkway in the Palmer Park submarket. Chestnut Springs, built in 1969, is located at 4315- 4331 N. Chestnut St., just off Garden of the Gods Road and Interstate 25 and adjacent to the Colorado Technical University. Brady O’Donnell, executive vice president with CBRE’s Debt and Structured Finance, arranged financing for the buyer. Vukota also recently acquired the Villages at Woodmen and Wind River communities in Colorado Springs. Other News A 193,000-square-foot former Boeing rocket plant at Pueblo Airport Industrial Park will be redeveloped as the largest CBD (cannabidiol) and hemp processing plant in the country. The city of Pueblo recently granted the newly formed hemp oil processing company CBD BioSciences, a joint venture between O.penVape and Thar Process, millions in capital incentives. “We all know terms like Silicon Valley and the Research Triangle. What this announcement does today is put Pueblo on the map as the Silicon Valley of hemp,” Sal Pace, Pueblo County Commissioner, said in a release. CBD BioSciences will receive $4.89 million in an economic incentive package to purchase equipment and retool the plant, which is projected to employ 163 people by November 2018. The city’s half-cent sales tax will partially fund the incentive package. CBD Biosciences’ incentive package also includes a separate pledge by the city of $3 million to assist with the remodeling of the Boeing building, owned by the city, which has been vacant since 2004. CBD BioSciences is a recently launched joint venture between the market leaders in the hemp oil extraction industry. O.penVAPE is the leading global brand in medical and consumer cannabis oil products. Thar Process is the worldwide leader in the chemistry and the technology behind essential oil extraction from a wide variety of crops. Hemp is an environmentally friendly and textile-ready natural fiber while CBD oil offers potential in the medical field. “The United States is the largest global market for foreign hemp sourced primarily from China. Let's change that,” said Barbara Vidmar, chairman of the Pueblo Economic Development Corp. “Rarely, if ever, have we at PEDCO been involved in the birth of an industry that offers so much potential for job creation,” said Jeff Shaw, vice president of PEDCO. “What other industry opens the door for economic cluster opportunities including industrial textiles (such as ropes and carpets), consumer textiles (such as apparel and bulk fabric), paper (such as cardboard, printing paper, and specialty paper), building materials (such as fiberboard, concrete, and insulation) and even foods (such as granola, food supplements, and cooking oils)?” The partnership between CBD BioSciences and Pueblo will extend into education and workforce training. The company will work with universities and educational institutions in the area to create an industrial hemp technology ecosystem. This includes the establishment of a Global Hemp Center for Innovation to promote scientific research and educational conferences. A private investor based out of California acquired a Colorado Springs self-storage facility earlier this fall. The buyer, which owns multiple self-storage facilities nationally, paid $5 million for the Stetson Hills Self Storage property, according to public records. Located at 5210 Tamlin Road, on the east side of Colorado Springs, the 49,680-sf property comprises 217 storage units and 580 outdoor parking spaces. The facility, built in two phases in 2003 and 2007, is fully fenced and gated with 24-hour security and keypad gate access. The facility also is situated on approximately 16.4 acres of land, allowing for expansion opportunities in the future. The LeClair Group consisting of Adam Schlosser and Chico LeClaire in Marcus & Millichap’s Denver office represented the seller. The pair also procured the buyer. A 29-unit apartment property in an “up-and-coming” area of Colorado Springs recently traded in a $1.78 million transaction. Local company 625 Hathaway LLC purchased The Landings at Aero Flats community at 625 Hathaway Drive. Hathaway Partners LLC was the seller. “This location has some of the best job growth stories in the entire city, which caught the buyer’s attention. FedEx is building a $20 million distribution center within a half-mile while Sierra Nevada is building an $88 million facility that will employ more than 2,100 people at the nearby airport park. Located only 10 minutes from the property, Raytheon also announced plans to add 700 employees to its workforce by the end of 2016,” said Saul Levy of ARA Newmark. Levy and ARA Newmark’s Kevin McKenna represented the seller of the 1960s property, where total population, since 2000, has grown 18.9 percent within a 5-mile radius. The acquisition represented the first multifamily acquisition by the buyer in the Colorado Springs market, however, it owns other multihousing properties in Denver. “The rare unit mix was one of the most attractive features about this property,” added Levy. “The property consists of 100 percent occupied three-bedroom, 1½-bath, 1,000-squarefoot floor plans. Effective rents were below 75 cents per square foot at the time of sale and the buyer will be able to push rents aggressively after exterior renovations.” Two-thirds of the unit interiors at The Landings at Aero Flats already have been renovated with new cabinets, countertops, tile backsplashes and updated bathrooms. Astride A Starship LLC recently purchased the Manitou Masonic Temple at 455 El Paso Blvd. in Manitou Springs. The buyer paid $450,000 for the 6,644-sf building situated on a 1.04-acre site. NAI Highland LLC’s Brendan Clarke handled both sides of the sale. The building was sold by the Manitou Masonic Building Board. Synergy Real Estate leased 10,623 sf of office space at 5225 N. Academy Blvd. in Colorado Springs. It leased the space from 100 Wadsworth & Wychy LLC. Weston Thomas of Cushman & Wakefield, a Cushman & Wakefield Alliance handled the transaction.