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MAY 7-MAY 20, 2014

by John Rebchook

When Jordon Perlmutter

opened Southwest Plaza in

1983, it was the biggest and

flashiest mall the Denver area

had ever seen.

Perlmutter, who developed

the mall with Samuel Pri-

mack and Michael Cooper,

sold it to Chicago-based Gen-

eral Growth Properties Inc. in

1998 for about $113 million.

Southwest Plaza has 1.39 mil-

lion gross leasable square feet,

according to GGP documents.

Now, GGP, which has more

than a $20 billion market cap

after successfully emerging

from bankruptcy following the

Great Recession, is embark-

ing on a massive renovation

and redevelopment that will

rebrand Southwest Plaza and

bring new tenants.

“It is safe to say it will be

the biggest investment in the

mall, except for perhaps when

it opened,” said Greg Sims,

general manager of the mall

at 8501 W. Bowles Ave. in Jef-

ferson County, just west of

Littleton.

“We are super excited about

it as a local team,” Sims said.

“We are basically taking a

very tired, old mall and trans-

forming it into a very open,

modern-day shopping center

that will bring it up to date

with lots of glass and open

areas,” he said.

“The food court, for example,

which has always been kind of

hidden, is now going to open

up and we’re actually going to

take advantage of the moun-

tain views for the first time,”

Sims continued.

“We are going to have out-

door patio seating available.

We’re going to bring the out-

doors in and the indoors out, if

you will.”

The new indoor-outdoor

dining area will be called

Mountain Terrace.

He said the construction

began March 1, but wasn’t

unveiled until April.

“A few things had to fall

into place and we could final-

ly unveil what was going on

behind the curtain,” Sims said.

Neither has GGP revealed

the exact amount it plans to

spend on the renovation, other

than to say it will be in themul-

timillions of dollars.

“It is going to be a very sig-

nificant investment,” Sims said.

In a Feb. 21 Securities and

Exchange Commission filing,

however, GGP said it already

had spent $1.2 million on the

redevelopment and it projects

it will receive a 9 percent to 10

percent return on the invest-

ment.

The final tab is surely to be

much higher.

“I could not say what they

would pay for a redevelop-

ment of the 1.3 million square

feet (mall),” said JohnWinslow,

principal of Winslow Property

Consultants LLC.

“If they spent $50 per square

foot, that would be $65 mil-

lion,” Winslow continued.

Although GGP is not plan-

ning to tear down the entire

mall like developers did at

Tamarac Square, Cinderella

City, Southglenn, Villa Ita-

lia and Westminster, “the cost

would be three times that,” or

$150per sf,Winslowestimated.

In addition to the redevel-

opment cost, neither Sims

nor GGP will reveal the

names of new tenants com-

New tenants, new look coming to SW Plaza

Shown is one of the new entryways into Southwest Plaza.

by Jill Jamieson-Nichols

Large-block

industrial

space is coming to Denver’s

central market with the sale

of the landmark Sears Outlet

and distribution facility at

Interstate 25 and Sixth Ave-

nue.

Los Angeles-based Arc

Capital

Partners

LLC

acquired the 370,000-square-

foot property on 17.69 acres

at 701 Osage St. for $16.25

million, or $44.90 per sf. It’s

an exceptionally rare oppor-

tunity to make industrial

space available to large ten-

ants in a submarket whose

vacancy rate is under 1.8 per-

cent.

“The ability to have a large

block of

space in

the central

D e n v e r

industrial

submarket

is really

unp r e c e -

dented. We

just don’t

have large

b l o c k s

of space there,” said Drew

McManus of Cushman &

Wakefield of Colorado Inc.,

who handled the transac-

tion with Sam Slaton, also of

Cushman & Wakefield.

Investors and developers

have been chasing the asset

for years.

“It took years of pursuit

and discussions with the

Sears Real Estate Depart-

ment to finally bring the

opportunity to realization,”

said McManus. “Ultimately

the timing was right for Sears

to monetize the asset, con-

solidate into their Brighton

distribution center and take

advantage of the improved

market conditions.”

It was Arc Capital Part-

ners’ first acquisition in Den-

ver. It engaged Denver-based

Triumph Real Estate Corp.

to acquire, upgrade and

convert the 330,000-sf ware-

house/logistics building and

40,000-sf outlet store into a

multitenant retail/show-

room and industrial park.

“For the first time in over

50 years, this property will

be open to tenants seeking a

centrally located industrial,

logistics or retail space in a

submarket with less than 2

percent vacancy,” said Nev-

ille Rhone, managing part-

ner of Arc Capital Partners.

“Denver’s robust economy

and growing population

bodes well for the sustain-

able demand growth we seek

Sears Outlet site to create new options

Sears’ warehouse/distribution facility will be turned into multitenant industrial space.

Drew McManus

Please see Sears, Page 12 Please see SW Plaza, Page 45

CONTENTS

Greater Denver 4 Boulder County 14 Larimer & Weld Counties 15 Colorado Springs 16 Finance 19 Law &Accounting 28 Property Management 30 Green Building 36 CDE 40 Office 2AA Industrial 3AA Multifamily 4AA Retail 5AA Who’s News 19AA

Inside

The gamut

Hudson’s Bay Centre draws ‘robust’

interest across the investor spectrum

Grand entry

TruAmerica enters the Denver

multifamily market in a big way

with the $55 million acquisition

of Tamarac Village Apartments

Solving the puzzle

A local company simultaneously

acquires North Valley Tech Center and

the leasehold interest on the land

High demand

Sought-after Bella Springs

apartments sell for $48.5 million

4 6 8 16 See Section B