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MARCH 5-MARCH 18, 2014

by John Rebchook

One of the biggest players

in Wall Street recently paid

$57.95 million for an apart-

ment building near City Park

in Denver.

A special warranty deed

shows that BRE Retreat at the

ParkApartments LLC bought

the 240-unit building at 1600

Fillmore St. from the Michel-

son Organization, based in

St. Louis.

Records filed with the Colo-

rado Secretary of State show

that BRE’s address is 345 Park

Ave. in New York City, the

world headquarters for pri-

vate-equity giant Blackstone.

The BRE document was

signed by Olivia John, a

principal of Blackstone’s real

estate group.

Michelson bought the

Retreat at the ParkApartment

building in 2007 for $45.6 mil-

lion from its developer, Lau-

ren Brockman, according to

public records.

That equated to $190,000

per unit and $212.96 per

square foot.

The latest sales price

equates to $241,458 per unit

and $270.70 per sf.

It wasn’t a typical deal.

Rather, it apparently was

a small part of Blackstone’s

$2.7 billion purchase from

the financing arm of General

Electric of 30,000 units in 80

different properties, primar-

ily in Dallas, other parts of the

Texas, Atlanta and the South-

east. The deal was announced

last August.

No broker was involved

in the Retreat of the Park

portion of the transaction, a

direct deal between GE and


Terrance Hunt of the Den-

ver office of ARA was not

involved in the transaction,

but he is extremely familiar

with the property.

“Michelson did not have

much ownership in the

Retreat at the Park,” Hunt


“GE basically held the equi-

ty position in the asset and

in one fell swoop, Blackstone

Blackstone pays $57.95m for apartments

The Retreat at the Park sale was part of a big deal.

by Jill Jamieson-Nichols

Raindrop Partners knew it

was making a great real estate

play even before signing a

lease that is, by Colorado stan-

dards, enormous.

The Denver-based company

leased 1 million square feet

to a national flower grower

within two weeks of buying

the former Color Star Growers

properties in Fort Lupton.

It saved a whole lot of Easter

lilies in the process.

“As soon as word got out

that we were the new owners

of these buildings, our phones

started ringing off the hook.

There was significant inter-

est from flower growers who

were vying to take the place of

Color Star in this market,” said

Jordan Scharg, a principal in

Raindrop Partners.

Color Star, which filed for

Chapter 11 bankruptcy in

December, owned two prop-

erties in Fort Lupton with 33

acres of flower greenhouses

and 130 acres of industrial and

agricultural land. The com-

pany supplied flowers to gro-

cery stores and flower retailers

throughout the Rocky Moun-

tain region. The glass green-

houses, 900,000 and 600,000 sf,

are so big that workers ride

bikes, tractors and forklifts to

get from one part of a building

to another.

Raindrop Partners, in a

whirlwind deal, competed

against seven other bidders to

buy the properties at auction.

It paid $2.2 million, a fraction

of the value.

“We had two weeks to

make a binding offer from the

time that we first looked at

the opportunity,” said Scharg,

explaining the bankruptcy

court drove timing. Raindrop

Partners hired around 40 for-

mer Color Star employees to

keep flowers growing, includ-

ing lilies for the upcoming Eas-

ter season, until the new tenant

stepped in.

Many of those who once

worked for Color Star Growers

now work for the new tenant,

which signed a 10½-year lease.

The tenant’s name hasn’t been


Demand for local and organ-

ic foods also is huge in Colo-

rado, and, according to Scharg,

the capital costs to develop

new facilities are prohibitive

for growers.

Raindrop Partners and

affiliate Circle Fresh Farms, a

network of local organic pro-

duce growers, are discuss-

ing the possibility that Circle

Fresh will occupy the remain-

ing greenhouse space. “We

saw this as an opportunity to

expand those operations, and

it was also a very good real

estate deal,” said Raindrop

Partners Principal Zach Frisch.

“I think it’s a nice marriage

between the operating busi-

ness and the real estate invest-

ment strategy,” added Doug

Elenowitz, who joined Rain-

drop Partners as a principal

last year to lead its growth

in real estate acquisitions and

urban mixed-use develop-


Although it invests in com-

mercial real estate, Raindrop

isn’t a typical buyer. It is a

private investment and advi-

sory firm focused on business

opportunities and real estate

assets that are sustainable,

energy efficient or that help

fulfill basic human needs for

Denver firm signs 1 million-sf tenant

Color Star Growers’ two former greenhouses in Fort Lupton cover

33 acres.

Please see Blackstone, Page 41 Please see Raindrop, Page 46


Greater Denver 4 Boulder County 12 Larimer & Weld Counties 13 Colorado Springs 14 Who’s News 17 Finance 18 Law &Accounting 20 Green Building 22 Property Management 26 CDE 30 Office 40 Industrial 40 Multifamily 41 Retail 42


Moving right along

NewMark Merrill Mountain

States finally gets the keys to

Dillard’s, paving the way for

redevelopment of Twin Peaks Mall


Newmark Grubb Knight Frank

hires veteran brokers to lead its

new Colorado Springs office

Big landing

The Encana Oil & Gas building in

Parachute sells in what likely is

that town’s largest-ever

commercial real estate sale


A Boulder investor pays $43

million for the award-

winning Block 32 at RiNo

12 16 15 41 See Section B See Section C