Colorado Real Estate Journal - April 20, 2016
Chris Wiedenmayer and Peter Peluso of Legend Investment Group recently represented the sellers of three retail centers, which together sold for almost $10 million. The largest deal was the $6.7 million sale of a 13,650-square foot Walgreens at 18550 Green Valley Ranch. The property was sold to a Chicago area buyer in a 1031 exchange. Wiedenmayer and Peluso could sell these kinds of single-tenant deals anchored by a national, creditworthy tenant like Walgreens all day long. “Investors really like these kind of deals to hold as long-term investments,” Wiedenmayer said. It’s a way of mitigating volatility with a steady flow of income, he said. “They are coupon clippers,” Wiedenmayer said. They are especially sought after in today’s low-interest-rate environment, when bonds are yielding almost nothing, he said. “Cap rates are really low, but they are still more than you can get from bonds,” he said. The Walgreens center was built in 2005. Walgreens signed a 75-year lease for the building in 2006. Its first right to terminate is in 2031. “The property has great visibility and strong store sales,” Wiedenmayer and Peluso wrote in their listing brochure for the Walgreens. The center is near other retailers such as TCF Bank, Dunkin' Donuts, McDonalds, Wendy’s, Grease Monkey, Taco Bell, 7-Eleven, Carl’s Jr., Chase Bank, H&R Block and Domino's. The second largest of the three deals was a $1.73 million sale for Buckley Square, a 3,436-sf, two tenant retail center at 16900 E. Iliff Ave., Aurora. It is 100 percent leased to Sprint, which takes 1,736 sf, and T Mobile, which leases 1,700 sf. “It was built in the 1980s and originally was a bank, but the bank went dark in 2012,” Wiedenmayer said. T Mobile and Sprint stepped in and leased the space. “They each had about 2.5 years left on their lease, so we reached out to them and extended their leases to five years,” Wiedenmayer said. “The longer leases added quite a bit of value to the property,” he said. Within a 3-mile radius, there is a population of 160,051 with an average household income of $65,753. Extend the radius another 2 miles and the population jumps more than double, to 333,510. A West Coast-based buyer bought the building in a 1031 exchange. In the third deal, they sold a 3,572-sf retail center at 8630 Green Valley Ranch Blvd. in Green Valley Ranch. The property was sold to a group of local investors, who outbid several other groups. The center was built in 2012 and about 80 percent occupied. “The buyer was a corporate guy who is purchasing the real estate for his future,” Wiedenmayer said. The center checked off quite a few boxes for him. “He wanted newer construction, he likes the location and he liked that it has some vacancies,” Wiedenmayer said. “The empty space gives it a value-add component,” he said. Tenants in the center include Dominos, H&R Block and White Fence Farms. The center is shadow-anchored by a King Soopers and a Walgreens. Within a 1-mile radius, there are 14,052 people. The median household income is $65,259. Within a 5-mile radius, there is a population of 112,859 and a median household income of $69,517. The area is expected to grow by more than 11 percent between now and 2020. “That area just keeps getting better,” Wiedenmayer said. “A light-rail station is king out there, Panasonic is going to build that beautiful campus, and the Gaylord convention center is being built in Aurora,” he noted. Other News The Bonfils Blood Center leased 1,963 square feet at High Pointe on Parker at 10233 S. Parker Road. Michael Quintan of Newmark Grubb Knight Frank represented the landlord in the transaction. Cresa Denver represented Bonfils.