Colorado Real Estate Journal - November 1, 2017
A Connecticut-based buyer likes the potential it sees in Northglenn. An affiliate of Hutensky Capital Partners of Hartford, Connecticut, paid $48 million for Northglenn Marketplace, a 439,000-square-foot retail center on a 55-acre site at Interstate 25 and 104th Avenue. “This represents a great opportunity to invest in a healthy retail market and our fund has the expertise to help the property reach its full potential,” said Brad Hutensky, CEO of HCP. “We are also excited about the opportunity to work with the city of Northglenn and our retail partners to create a revitalized center.” HCP has hired Evergreen Development, the Mulhern Group, SullivanHayes Brokerage and Kimley-Horn to assist in the stabilization and redevelopment of the center. “Evergreen is thrilled to work with HCP and its team on planning and executing the redevelopment of Northglenn Marketplace,” said Tyler Carlson, managing principal, Evergreen Development. “We look forward to working closely with the city and the urban renewal authority in partnership to reinvigorate this important asset and to restore its relevance in today’s ever-changing retail environment.” The marketplace is home to tenants including Bed Bath & Beyond, Ross Dress for Less, Office Depot, PetSmart, JoAnn Fabrics and Lowe’s Home Improvement. It was 40 percent vacant at the time of sale. HCP’s primary goal with Northglenn Marketplace is to refresh, rebrand and reenergize the center. It plans to fill empty storefronts with a mix of retail, restaurant and entertainment related tenants. Courtney Keys of SullivanHayes is handling leasing of the center, which has approximately 20 vacant spaces totaling 152,000 sf from 1,000 to 32,365 sf. Phased work is expected to start in 2018 with completion in 2020. The first phase will include stabilizing the center and attracting new tenants as well as rebranding the center. The marketplace has seen several retailers relocate or close nationally during the last several years. “I really have to salute the current businesses in the center for their loyalty to Northglenn,” said Debbie Tuttle, manager of economic development for the city and executive director of the Northglenn Urban Renewal Authority. “This will be a destination location where families and visitors will want to be. The new center will become a part of their lives for shopping, restaurants and entertainment. “This is the No. 1 priority for the City Council and is the highest sales tax generator for the city. The retail market is changing rapidly with ‘right sizing’ and online sales. We want to create a ‘sense of place’ where families and visitors will want to shop, eat and enjoy entertainment and other amenities,” she added. According to public records, HQ8 10410 10450 Melody Lane LLC (LNR Partners) sold the center. The original 830,000-sf mall, owned and developed by Jordon Perlmutter, opened in 1968. Perlmutter sold the mall in 1987 and, in 1998, purchased the property again. He redeveloped the property into a 650,000-sf power center in 2001, 439,000 sf of which HCP owns. Perlmutter sold it in 2006. Other News • Oskar Blues will debut its third grill and brew location in Lower Downtown Denver late this month. Oskar Blues Grill and Brew signed a 10-year lease with City Street Investors for the two-story 10,636-square-foot space at 1630 Market St. The multilevel space will feature traditional restaurant and bar service upstairs while downstairs the Black Buzzard music venue occupies 5,500 sf and features a stage, professional sound system, grab-and-go food kiosk and full-service bar. “We see the location’s history as being an asset to Grill and Brew’s theme,” explained Oskar Blues Grill and Brew’s Restaurant Director and Partner Jason Rogers.“Crocs provided a great mix of dancing, food and fun, while its predecessor Brenden’s Pub was known for being one of the city’s best spots for live jazz. We’re hoping to bring the spot back to life with our own version of food and Americana music. Denver is currently home to many international brands and people. We feel Oskar Blues Grill and Brew will be a unique offering to the market that currently doesn’t exist and will be an asset in a vast portfolio of eateries and bars.” Rogers will lead the construction team and oversee the initial build-out, which calls for a complete renovation of the space while preserving key elements of the original framework. “We’ve been working diligently over the past 20 years to evolve and perfect our concept – and now we’re ready to bring Grill and Brew’s signature blend of Southern-inspired Creole and Cajun dishes and entertainment to Denver,” said Rogers. “It mirrors the Lyons and Colorado Springs locations, while adding a signature Denver flair. We want to deliver something special that LoDo could call its own. We’re excited to become a small part of such a great community and district.” • An 11,878-sf retail property recently traded hands for $67.35 per sf. The center at 19-25 S. Third Ave. in Brighton sold for $800,000 to an undisclosed buyer. The property, currently leased to six tenants, sits on a 0.34-acre lot just off Brighton’s main street. Jim Knowlton of the Knowlton|Lawson team at Pinnacle Real Estate Advisors LLC represented the buyer. “The buyer owns another mixed-use retail/residential property right next to this property that he has done extensive renovations on over the past year and a half. He plans on implementing a similar renovation strategy here, which will allow him to significantly increase his NOI,” said Knowlton. • Nazar Market renewed its lease at the Aspen Commons Shopping Center, a 26,744-sf center in Denver. Nazar Market leased the 2,709-sf space at 1842 S. Parker Road No. 6-8 for seven years. John V. Propp of John Propp Commercial Group handled the transaction. • The robust economy has Denver’s retail market riding high, according to a third-quarter report on the market by Marcus & Milichap. The report noted that throughout the region, older shopping centers are being transformed into mixed-use, pedestrian-friendly developments, including the Westminster Promenade, which is being configured to include new stores and restaurants, apartments, office space and a hotel. Robust residential growth and the availability of assets have more investors looking in suburbs south of Denver, the report added. Buildings that average less than $10 million are being targeted, indicating a large presence of individual buyers, with more coming from outside of Colorado. Many investors seeking lower entry costs and higher yields sought strip centers in older neighborhoods of Denver and first-ring suburbs. In these locations, assets below $200 per sf could be found during the last four quarters at cap rates that were typically in the 6 to 7 percent span. Marcus & Millichap noted that restaurants and fast-food stores remain the prime choice of many buyers. During the last 12 months, these assets metrowide changed hands at an average of $354 per sf and nearly $700 per sf, respectively. First-year returns typically began in the 5 percent range. Marcus & Millichap’s retail outlook for 2017 noted that completions will rise 110,000 sf above last year’s 640,000-sf mark with the northwest submarket receiving the largest portion of the deliveries. Additionally, absorption will outpace new inventory, resulting in vacancy ending at 5.2 percent, down an annual 20 basis points and building on last year’s 40 basis-point drop. Rents will jump to $17.60 per sf in 2017 – the largest percentage (4.8 percent) increase in nine years and surpassing the prerecession high, the report said.