Colorado Real Estate Journal - August 17, 2016
Industry, the cutting-edge collaborative workspace, has been in the local and national spotlight a lot since Jason Winkler and his wife, Ellen, opened it in RiNo in 2014. For example, a year ago, the Wall Street Journal described Industry, at 3001 Brighton Blvd., as “an example of the entrepreneurial forces that are luring a flood of young professionals here.” Now they are developing another shared office space project in a former industrial building in RiNo. But Industry RiNo Station is not the second phase of Industry. “They’re a whopping nine blocks apart,” said Jason Winkler. Not that there aren’t similarities between the two. “Essentially, Industry RiNo Station is Industry 2.0,” he said. Industry RiNo Station is at 3825 Lafayette St., a block east of the 38th and Blake A-Line rail station. The transformation of the 152,000-square-foot building that was constructed in 1969 recently took a big step with a $36 million loan from FirstBank. The loan was handled by John Markovich and Adam Sands at FirstBank. They were thrilled to make the loan. “Jason has had a pretty significant presence in RiNo for the past several years,” said Markovich, a senior vice president at FirstBank. “He is kind of a pioneer for this kind of creative office space product,” Markovich continued. “We are really impressed with Industry. We think it is a great property.” In fact, FirstBank has wanted to work with Winkler for a while. “Jason has been on our radar screen,” Markovich said. “He is the kind of local developer that fits our profile at FirstBank,” he said. “We really want to build a relationship with him.” This marks the first deal FirstBank has done with Winkler. “We did look at refinancing the debt on Industry, but he found a funding product through a life company that was a little better suited for his needs,” Markovich said. In addition to Winkler, FirstBank also plans to extend its presence in RiNo. “We like what we see going on in RiNo,” Markovich said. “We have been talking to several developers” about how FirstBank can help them, he said. He likes what is happening in RiNo so much that last year he organized a tour of the neighborhood for FirstBank’s board. “I think they were really impressed by everything happening in the community,” Markovich said. “I think it helped their understanding and I think it played an overall role in their approving the loan for Industry RiNo Station,” he said. There are 6,262 households within a 1-mile radius of the site, although that jumps to 81,486 within a 3-mile radius, according to research by the CoStar Group. A similar trend can be found with the daytime employee base. There are 8,006 people working within a 1-mile radius, but that rises to $177,174 when another two miles are added to a circle surrounding the site. The median household income within a mile of Industry RiNo Station is $40,382, but it jumps by more than $10,000 to $50,721 within a 3-mile radius, according to CoStar. While FirstBank has made several loans in RiNo, the $36 million loan for Industry RiNo Station is by far its largest one to date. Lessons learned from Industry will be incorporated into Industry RiNo Station. There are similarities with the two projects. “Both buildings are almost identical in size and they are both adaptive re-uses of old warehouses,” Winkler said. Industry RiNo Station, like Industry, will have a lot of glass and steel, and open workspace. He said they are “really happy” with Industry, but Industry RiNo Station will raise the bar. “Probably the biggest change will be in the way the space comes together,” Winkler said. “Right now at Industry, if you want to have an event for 100 people, it’s kind of hard to do during the day, because it can disrupt other office users,” he said. At Industry RiNo Station, it will be easy to cordon off space to accommodate events with a large number of people during the day. As far as FirstBank, he was extremely pleased. The loan was for construction and has the potential to be converted into a permanent loan, he said. Winkler’s group, including his equity partner, New York-based Clarion Partners, already had purchased the property, he said. “We are really excited to be moving forward on this and we would like to do more with FirstBank,” Winkler said. “We just loved working with them.” Other News Fountainhead Commercial Capital provided a $3.39 million loan to Interstate 17 Inc.for its purchase of the 77-unit Comfort Inn & Suites in Westminster. Interstate 17 Inc., which according to the Colorado Secretary of State’s office is headed by Ky Truong of Aurora, paid $6.7 million for the hotel at 12085 Delaware St. Interstate 17 plans to renovate the hotel and change its flag to Quality Inn and Suites. The 40,000-square-foot hotel is on a 2-acre site near Interstate 25. Fountainhead’s fixed-interest loan, at approximately 50 percent loan-to-value, provides financing for the purchase of fixed assets, such as real estate, furniture and fixtures. “We are so pleased to assist the Truong family with financing the latest edition to their hotel portfolio with a Fountainhead conventional loan,” said Chris Hurn, CEO of Fountainhead. “The hotel will be improved in the very near future and offer a new option to travelers in the Westminster area of greater Denver,” Hurn said. Los Angeles-based Liberty SBF, in its first loan in Colorado, provided $3.05 million in financing to John and Shefali Millea and San Francisco-based Siena Investment Holdings LLC for their purchase of a 60-key, limited-service Quality Inn hotel in Pueblo. The U.S. Small Business Administration 504 financing was for entire acquisition cost of the hotel. The deal was closed in 33 days. The buyers, local hoteliers, had requested a quick closing and the speed of the closing exceeded their expectation. Liberty SBF financed the loan though its National First Lien SBA 504 wholesale program. Liberty SBF worked with Denver-based Colorado Lending Source as the certified development company on the loan to quickly gain SBA approval and expedite the loan processes. “Through our partnership with Liberty SBF we were able to get SBA approval in place and meet the borrower’s closing timeframe in short order,” said Kamry Bowman, a loan officer at the Colorado Lending Source. “We found Liberty SBF to be a great partner throughout the process,” Bowman said. “The perception in the marketplace is that closing an SBA loan is a lengthy process,” said Alex Cohen CEO of Liberty SBF. “We have proven that with the right team, a tailored SBA 504 loan can be closed quickly and efficiently under a strict deadline," he said. Siena was in a 1031 exchange and that “presented a stressful and tight timeline to find our next financial investment,” said John Miller, president of Siena. “Liberty SBF understood our challenge, helped identify the best loan package and secured competitive financing for our hotel within deadline,” Miller said. “They came through for us in a big way,” he said.