Colorado Real Estate Journal - December 2, 2015
When Josh Simon and his team went looking for lenders to fund a new, first-class industrial facility being developed by Denverbased Corum Real Estate Group, there was no shortage of lenders willing to step up the plate. “We had a ton of interest” from lenders, for both equity and the construction loan, said Simon, a managing director for the Denver office of Holliday Fenoglio Fowler LP. While Simon did not release the amount of the loans or the identity of the lenders, records show that FirstBank provided an $8.58 million construction loan that is due in November 2017. Corum paid $2.08 million, or $6.32 per square foot, for the 7.55- acre site at 495 E. 62nd Ave., which is at the northeast corner of East 62nd Avenue and Interstate 25 in Denver. That loan was provided by RREEF Fund of America, a pension adviser, according to records. The seller was A. Ficco & Sons LLC, records show. Corum plans to develop Central 62 Distribution Center, a 124,600-sf, Class A spec industrial warehouse and distribution facility, on the site. ”Corum was able to find an unbelievable industrial development site in the heart of central Denver,” Simon said. The site is about 5 miles from Denver’s central business district. In addition to overlooking I-25, it also will be close to Interstates 70, 71, 76 and 270. The center also is near rail access and is 24 miles from Denver International Airport. Ware Malcomb is designing Central 62, which will include a one-story, multitenant building with 28-foot clear height and 22-foot dock-high doors. “Given the site attributes and the scarcity of industrial opportunities in the market, we had a tremendous amount of interest from capital, creating a highly competitive environment to capitalize the deal,” Simon said. Lenders, he said, liked the “great visibility” of the site, as well as the size of Central 62. They also were eager to make the loan given the strength of Denver’s industrial market, he said. “I believe the industrial vacancy rate is sub 5 percent,” Simon said. “There is a tremendous need for more functional, efficient warehouse space in Denver.” A lot of the industrial space in the area is “functionally obsolete,” he said. When completed in 2016, Central 62 will be one of the only Class A industrial buildings in the northeast submarket, according to HFF. Lenders also were eager to provide equity and construction loans for Central 62 because of the strength and history of Corum. “Corum has developed a lot of properties in a lot of asset classes over the last 30 or so years, including a lot of industrial properties,” Simon said. Indeed, Corum, founded in 1986, has developed more than 3.8 million sf of industrial properties worth more than $190 million. “Corum’s experience with industrial developments made lenders very comfortable,” Simon said. “Really, this was a case of the right developer, at the right time, bringing the right product to the right location,” Simon said. Other News Denver-based Montegra Capital Resources funded a $375,000 mortgage loan on a 14,100-square-foot retail building. in Longmont. Anytime Fitness leased 8,550 sf in the building at 1111 Francis St. The remaining 5,500-sf is vacant. The borrower, J.K.B. Store Properties LLC, owns the building free the clear. J.K.B. used the proceeds from the loan to reimburse itself and to improve the vacant space. Montegra closed the loan in less than two weeks. The 50 percent loan-to-value loan carries a 10 percent interest rate and a 2.5-point charge.