Colorado Real Estate Journal - December 7, 2016
A tax credit property in Colorado Springs sold to a Seattle-based buyer for $22.13 million. Investors Capital Group paid $122,917 per unit for Constitution Square, a 180-unit community at 7230 Constitution Square Heights. The community, built in 2002, represents the buyer’s second asset in the Colorado Springs market. “There are very few of these types of assets that come up for sale,” Kevin McKenna of ARA Newmark said of the property, which offered a good opportunity for a buyer to come in at basis for the product type. There were multiple offers received on the community due to the scarcity of this product type, said McKenna. “When assets like this do come up on the market, they get bid up as there are not many like this available throughout Colorado.” Additionally, the property was offered well below replacement cost and since Constitution Square is located on the east side of the city it is right in the path of growth, near the airport and Peterson Air Force Base, added McKenna, who handled the sale of the community with ARA’s Saul Levy. Constitution and Canada LP sold the apartment property, which comprises one-, two- and three-bedroom units. It was “well” occupied at the time of sale. Other News An industrial building in the heart of Colorado Springs recently sold in an all-cash transaction. Jupiter-Bar LLC paid $2.66 million for the 44,465-square-foot property on 5.11 acres at 2850 N. El Paso St., just to the southeast of Fillmore Street and North Nevada Avenue. “The buyer is a longtime student housing developer and owner who purchased this property in order to diversify their holdings,” said Troy Meyer.“They sold an apartment complex in Fort Collins as the downleg in their 1031 exchange. This property was purchased for existing income stream and investment. ” Meyer and Kevin Matthews of SVN/Denver Commercial along with John Rodgers of Peak Commercial Properties represented the seller, 2850 North El Paso LLC. The buyer was represented by Steve Kawulok, also of SVN/Denver Commercial. Current tenants are Cintas Corp. and Colorado Industrial Packaging. A former Kindercare building in Monument traded for $1.28 million. Monument Occupational Services LLC purchased the 8,580-sf property, built in 2001, located at 1150 Baptist Road, off Baptist Road and Jackson Creek Parkway, near Interstate 25, and adjacent to a King Soopers. The seller was Michael Delia Credit Shelter Trust, Angela Delia, Barbara Huddleston, JVDG Colorado LLC, David & Pacita Patterson Trust, Quijano Family LLC, The Tone Family Trust, Joseph & Lynn Warren Trust, Charles Westling and Catherine Westling. Ian Elfner of NavPoint Real Estate Group represented the seller. X-IO recently signed a new office lease at Briargate Tech in Colorado Springs. It leased 14,302 sf at the building at 2375 Telstar Drive. The landlord is Lincoln Property Co./Colorado Springs Office Buildings Inc. X-IO was represented by Olive Real Estate Group. The landlord was represented by Greg Phaneuf of Colorado Springs Commercial, a Cushman & Wakefield Alliance. Quantum Commercial Group Inc. recently released its third-quarter figures on the Colorado Springs market, including its office market report, which noted that the city’s office market numbers were negative in the third quarter of 2016 but remain in the black year to date. According to the report, the overall vacancy rate edged up over the quarter to 11.2 percent from 11 percent in the second quarter, with negative absorption for the second quarter in a row, but the year-to-date absorption is still a positive 65,364 sf. The leasing market seemed fairly quiet though while owner-user and investment sales remain active. The average quoted asking rental rate for all classes of available office space was $16.41 per sf per year full service – little change in the average quoted asking rate over the past several quarters. However, the report stated that there is an expectation of upward pressure on rates in some of the submarkets as vacancy continues to decline and very little new space is constructed. Quantum anticipates that vacancy will continue a downward trend in 2017. It noted, “The strength in job creation over the past year has yet to be felt in the office market. Much of the growth has been internal growth by existing companies. These companies have internal existing surplus space and they have been filling that with new positions. They are also utilizing and occupying less space per employee, thus becoming more efficient. It has taken time to work through this but, eventually, new job creation will result in expansion rather than internal growth.” The firm also released reports on Colorado Springs’ investment, industrial, office, land and residential markets, all of which continued to show improvement, with residential land and home sales leading the way.