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NOVEMBER 21-DECEMBER 4, 2012

by Jill Jamieson-Nichols

Eldorado Ridge, a Class A

office park on the Denver-

Boulder corridor, traded for

$42.4 million, or $130.76 per

square foot, according to pub-

lic records.

Lowe Enterprises teamedup

with Starwood Capital Group

to buy the 324,269-sf Broom-

field property, according to

Lowe’s website. Situated on

a ridge that overlooks Inter-

locken Advanced Technol-

ogy Environment, Eldorado

Ridge consists of three build-

ings at 11001, 11101 and 10901

W. 120th Ave. The buildings

were 67 percent occupied at

the time of the sale.

Lowe didn’t return a phone

call regarding the transaction,

but it said on its website that

it will create and implement a

programof property improve-

ments to include “refreshing

the interiors, with particular

emphasis on the lobbies and

entrances, as well as land-

scaping enhancements.”

CBRE brokers Geoff Bau-

kol and Tim Swan, with assis-

tance of Mike Pepper of Ken-

nedy Wilson, represented sell-

ers Eldorado Ridge I & II LLC

and Eldorado Ridge III LLC, a

private multimember owner-

ship structure based primarily

in California.

Located between Inter-

locken and Rocky Mountain

Metropolitan Airport, Eldo-

rado Ridge is in the heart of

the U.S. Highway 36 corridor,

which caters to technology

tenants. Its amenities include

expansive mountain views, as

well as proximity to the air-

port, Flatiron Crossing Mall

and the Omni Interlocken

Resort and golf course.

The four-story buildings

range from 107,720 to 108,318

sf. They are a home to Renew-

able Energy Services, which

occupies more than 20,000

sf, Regis University, which

has more than 17,000 sf, and

Quintess, which leases in

excess of 14,000 sf.

Eldorado Ridge was built in

1999-2001.

s

Eldorado Ridge trades at $42.4 million

Eldorado Ridge features three Class A buildings situated between Interlocken and Rocky Mountain

Metropolitan Airport.

by John Rebchook

John Yarberry loves to

speak about commercial real

estate.

Yarberry, a senior vice pres-

ident at Wells Fargo, was able

to address a wide range of

topics regarding commercial

real estate when he joined

two other bankers – Kirk

Monroe and Ron Tilton, exec-

utive vice presidents at Vectra

Bank Colorado and FirstBank

HoldingCo., respectively – on

a banking and finance panel

at the recent Rocky Mountain

Commercial Real Estate Expo

and DU Fall Forecast.

The 18th annual event,

hosted by the University of

Denver’s Franklin L. Burns

School of Real Estate and

Construction Management

and the Denver Metro Com-

mercial Association of Real-

tors, drew about 1,000 bro-

kers, developers, lenders and

others in the commercial real

estate industry to the Colora-

do Convention Center Nov. 2

During his presentation,

Yarberry displayed a chart

that compared, on a historical

basis, 10-year Treasury yields

and commercial real estate

cap rates.

“As you can see, we are

experiencing historic lows

in Treasury rates due to the

Fed’s policy of easing by pur-

chasing securities,” Yarberry

said.

“This has had a huge effect

on the real estate market and

debt markets,” Yarberry con-

tinued. “The Fed’s strategy

is largely in consideration of

the mountain of commercial

mortgage loans maturing in

the middle of this decade.”

So what does that mean for

rates?

“In the near term, this has

taken the interest rate out of

the market equation,” Yar-

berry said. “This had made

it possible to refinance and

restructure deals in order to

see the necessary results of

the deleveraging of market

values.”

The drop in Treasury rates,

he said, has “pushed money

into the stock market and

into commercial real estate.

The higher stock values have

allowed insurance companies

and pension funds to allocate

more dollars into commercial

real estate.”

Real estate investment

trusts, he said, also have been

able to raise “considerable

funds” for investments.

Following his presentation,

Yarberry said that today’s

low rates are a double-edged

sword.

“What will happen when

the investors who bought

properties at these historic

low rates need to refinance

at a time when rates are

likely to be much higher? I

just hope that the rents have

risen enough to cover the

increased rates.”

Some borrowers have been

able to lock in rates at 4 per-

cent or lower, with a cap rate

in the 4.5 percent to 5.5 per-

cent range, he said.

“Will rental rates have

increased sufficiently in order

to offset the low cap rates

based on a point-in-time mar-

ket value appraisal?”

Compounding the risk, he

said, is the potential debt ser-

vice requirements required

in an environment of much

higher rates.

Banks, he noted, also ben-

efit from increased demand

from commercial real estate

borrowers, as the new loans

provide a strong spread

between what they are pay-

ing borrowers for deposits

and what they can lend the

money at.

“A 4 percent or 5 percent

mortgage is a pretty good

deal,” Yarberry said. “It

relieves owners with cash

flow issues and provides a

decent return for lenders.”

Indeed, Monroe noted that

about the only way banks

can make money is by mak-

ing loans.

He said that banks, how-

ever, such as Zions Bancorp.,

Rates good for CRE, but refi worries loom

JohnYarberryofWellsFargoBank

speaks at the Rocky Mountain

Commercial Real Estate Expo and

DU Fall Forecast.

Please see Rates, Page 17

CONTENTS

Greater Denver

4

Boulder County 10 Larimer & Weld Counties 12

Colorado Springs

14

Colorado 15

Finance

16

Law &Accounting 18

Property Management

20

CDE 29

Who’s News

35

Office

38

Industrial 39 Health Care 40 Retail 44

Inside

Looking north Venerable Denver developer

Dana Crawford buys RiNo

land for mixed-use development

Out of space Arista has a tenant for its

last office space and starts

preleasing a second office building

Finding a fit The buyer of a 426-unit apartment

community in Denver ‘understands how

this asset fits into the apartment

sector,’ says ARA’s Jeff Hawks

By popular demand The Disney Store returns to

Park Meadows as the resort-style

shopping center turns sweet 16

4 10 42 44