Colorado Real Estate Journal - February 1, 2017
A “jewel” of an office building in the Briargate submarket in Colorado Springs sold to a private buyer for $17.5 million. “It’s one of the top-of-class buildings in Briargate. It has a lot of government-related tenancy in there with very sticky tenants,” Jason Schmidt of JLL said of Research Corporate Center. The 98,904-square-foot, three-story building also benefits from once being owned by DPC Development Co., which instituted its spec suite program at the property that in turn cuts down on the future costs for a new owner, like buyer Maple Hill LLC. “The longevity and stickiness of the tenants and the spec suite-nature of the building appealed to private-type buyers. It was a great little jewel building,” added Schmidt, who handled the sale with JLL’s Patrick Devereaux. Brookwood Financial Partners was the seller. Located at 8610 Explorer Drive, Research Corporate Center was constructed in 2000 as a single-tenant property, however, was always occupied as a multitenant building. At the time of sale, Research Corporate Center had occupancy in the high 90 percent-range and is home to tenants including General Dynamics, Envision Radiology and the U.S. General Services Administration. There were multiple offers received on Research Corporate Center. Brian Wagner and Mark O'Donnell of Newmark Grubb Knight Frank handle leasing for the building. Other News Sportsman’s Warehouse expanded its operations to include three new retail stores, including a Pueblo location that will be the sixth Sportsman’s Warehouse in Colorado. The Pueblo location will be constructed in a smaller format and be located just of Interstate 25 in the north side of town. It is expected to open in the second half of 2017. “We are excited to further expand our presence in states we know very well. These new markets have a large user base that is currently underserved through existing retailers," noted John Schaefer, Sportsman’s Warehouse CEO. Premiere Global Services recently renewed its office lease at the Garden of the Gods Business Park in Colorado Spring. It renewed its 75,000-square foot lease at the building at 2424 Garden of the Gods Road. The landlord, GOTG LLC, was represented in the long-term extension by Greg Phaneuf and Peter Scoville of Colorado Springs Commercial, a Cushman & Wakefield Alliance. Newmark Grubb Knight Frank represented the tenant. Ted Link and David Schroeder of Cascade Commercial Group recently negotiated two separate leases at 3630 Sinton Road in Colorado Springs. Technologies Inc. will occupy 4,306 sf and Bright Real Estate Development LLC will occupy 1,506 sf. Both will occupy spaces on the third floor. The tenants were attracted to the Sinton Pond office building due to the reasonable rental rates, easy access to Interstate 25 as well as the growth opportunities, noted Cascade Commercial Group, which represented the building owner in both transactions. The stabilized apartment vacancy rate for the Colorado Springs area increased 71 basis points over the third quarter to 4.3 percent, according to Apartment Insights’ recently released Statistics/Trends report for the fourth quarter of 2016. The increase, typical for this time of year the report noted, also is 8 basis points higher than the rate of 4.22 percent at yearend 2015, however, is still below the vacancy rate of 5.41 percent experienced in 2014. The quarter also saw negative absorption, losing 187 occupied apartments. The trailing four quarter total fell to 338 units, the lowest annual absorption rate since early 2014. Despite the increase in vacancy and negative absorption, rents rose in Colorado Springs during the fourth quarter. The average rent for the Springs market rose by $12, or 1.3 percent. The annual gain was $74 for an 8.4 percent annual growth rate. The rent per sf increased by a penny during the quarter to $1.17. Apartment Insights reported that seven sales of 50-plus units closed during the quarter. There was a wide range of price per unit for the 1,403 apartments sold in the fourth quarter – ranging from $60,238 to $204,710 per unit. Over 2016, there were 16 transactions of properties with 50 or more units totaling $339 million in sales and averaging $107,914 per unit – below 2015’s and 2014’s volume of $409 million and $444 million, respectively, however, considerably higher than the average unit price of $86,666 and $87,208, respectively. While the volume of sales has declined from the past couple years, prices continue to push new highs. Low vacancy, high rent growth and a moderate supply of new apartments will most likely keep investor interest high in the coming year, the report noted.