AUGUST 19-SEPTEMBER 1, 2015 by John Rebchook Not long ago, apartment investors had little interest in the Glendale area market. But not Morgan Reynolds and Steve Daniel, principals of Denver-based Blueline Proper- ties. In 2011, they started buying older apartment buildings in Glendale and in Denver, across the street from Glendale. “When we started investing, there was no competition,” Daniel said. “Carmel was a big owner at the time, but really we were the first people to come into that market.” Their bet, instincts and pro- jections that they could trans- form tired buildings and make them hip, lower-cost options to trendier urban Denver neigh- borhoods paid off. They recently sold five apart- ment communities for a total of $69.5 million to Arel Capital, based in New York City. That works out to an average of $129,423 per square foot. Records indicated they paid $33.46 million for the five apartment communities. One of the buildings that they bought, refurbished and sold was the Birch, a 129-unit building built in 1965 at 4390 E. Mississippi Ave. It is believed to be the first apartment building built by the late and legendary Kal Zeff, the founder of Carmel Properties, which he built into the largest- ever locally owned apartment empire in the Denver area. “That’s the story,” said Ter- Glendale hot apt. market, portfolio shows The Birch was not only one of the apartment buildings in a Glendale portfolio that recently sold, but also it is believed to be the first apartment building in the metro area developed by Kal Zeff. by Jill Jamieson-Nichols Local developers Bradbury Properties and Confluent Development have teamed up to build out the remain- ing 72 acres at HighField Business Park, starting with a 100,000-square-foot specula- tive industrial building. HighField Building 5 will be the fifth building to be built in the business park near E-470 and Peoria Street in the last five years. The most recent spec building, completed in spring 2014, is fully leased. “The market is tight. If you’re a tenant looking in the south- east flex industrial market, you have very, very few options – certainly no options that I’m aware of of 100,000 square feet,” said Confluent Develop- ment’s Marshall Burton, who added the building will offer flexible options to tenants from 15,000 to 100,000 sf with a cou- ple of 8,200-sf spaces. It will feature 24- to 28-foot- clear warehouse space, 5 to 30 percent office build-out and ample parking. Asking lease rates range from approximate- ly $8.50 to $10 per sf triple net. Jim Bolt, Jeremy Ballenger and Tyler Carner of CBRE, which handled lease-up of HighField Building 3, are mar- keting Building 5. “HighField Building 5 signi- fies the industrial momentum we are seeing in the south- east Denver market,” said Bolt. “This is the fourth speculative building constructed in the area over the past seven years, and the timing is appropriate by Bradbury Properties and Confluent Development to take advantage of the growing interest in this location.” The approximately $10 mil- lion project is expected to be completed by spring. “We do have several active prospects for the building currently,” Burton said. HighField Business Park is being developed on land Bradbury’s family owned and farmed for 60 years. “The opportunity to trans- form land that’s been in our family for decades into prop- erty that will give Colorado residents a place to work in a top location is very meaning- ful,” said Bradbury. “We are proud to team up with a great partner in Confluent Develop- ment to make HighField Build- ing 5 possible.” HighField Business Park sits on an elevated site, and the buildings, attracting compa- nies including Polystrand Inc., Applied Controls, Colorado Studios, EdgeConneX and J.R. Butler, also set a high standard, said Bradbury. Intergroup Architects, which designed all the buildings at HighField, is the architect for Building 5. Bradbury Properties and Confluent Development, which has developed nearly 3 million sf of commercial prop- erty in the southeast Denver market, formed a partnership to develop the remaining land at HighField earlier this year. Bradbury, Confluent to build 100,000 sf Developers of the 75-acre Denver Design District will convert a former showroom into 60,000 square feet of creative office space. A rendering by Davis Partnership Architects gives an idea of what build-out could look like. (See story on Page 7) Designs on office space Please see Glendale, Page 10 Please see Bradbury, Page 38 In this issue… Staying over Starwood, often associated with hotels, buys a $93.1 million apartment portfolio Insurance Allstate secures 70,273 square feet of Class A office space in Lone Tree Fastened up With Empire Staple Co., Trammell Crow already has a build- to-suit user as it starts construction on Crossroads Commerce Park Shopping-centered An Arizona investor pays $19.4 million for Seven Hills Plaza in Aurora Inside 4 8 1AA 9AA CONTENTS Greater Denver 4 Boulder County 12 Larimer & Weld Counties 13 Colorado Springs 15 Finance 16 Law & Accounting 18 CDE 20 Property Management 35 Office 2AA Health Care 3AA Industrial 4AA Multifamily 5AA Retail 9AA Who’s News 11AA
Transcript
AUGUST 19-SEPTEMBER 1, 2015
by John RebchookNot long ago, apartment
investors had little interest in the Glendale area market.
But not Morgan Reynolds and Steve Daniel, principals of Denver-based Blueline Proper-ties.
In 2011, they started buying older apartment buildings in Glendale and in Denver, across the street from Glendale.
“When we started investing, there was no competition,” Daniel said.
“Carmel was a big owner at the time, but really we were the first people to come into that market.”
Their bet, instincts and pro-jections that they could trans-form tired buildings and make them hip, lower-cost options to trendier urban Denver neigh-borhoods paid off.
They recently sold five apart-ment communities for a total of $69.5 million to Arel Capital, based in New York City.
That works out to an average of $129,423 per square foot.
Records indicated they paid $33.46 million for the five apartment communities.
One of the buildings that they bought, refurbished and sold was the Birch, a 129-unit
building built in 1965 at 4390 E. Mississippi Ave.
It is believed to be the first apartment building built by the late and legendary Kal Zeff, the founder of Carmel Properties,
which he built into the largest-ever locally owned apartment empire in the Denver area.
“That’s the story,” said Ter-
Glendale hot apt. market, portfolio shows
The Birch was not only one of the apartment buildings in a Glendale portfolio that recently sold, but also it is believed to be the first apartment building in the metro area developed by Kal Zeff.
by Jill Jamieson-NicholsLocal developers Bradbury
Properties and Confluent Development have teamed up to build out the remain-ing 72 acres at HighField Business Park, starting with a 100,000-square-foot specula-tive industrial building.
HighField Building 5 will be the fifth building to be built in the business park near E-470 and Peoria Street in the last five years. The most recent spec building, completed in spring 2014, is fully leased.
“The market is tight. If you’re a tenant looking in the south-east flex industrial market, you have very, very few options – certainly no options that I’m aware of of 100,000 square feet,” said Confluent Develop-ment’s Marshall Burton, who added the building will offer flexible options to tenants from 15,000 to 100,000 sf with a cou-ple of 8,200-sf spaces.
It will feature 24- to 28-foot-clear warehouse space, 5 to 30 percent office build-out and ample parking. Asking lease rates range from approximate-
ly $8.50 to $10 per sf triple net.Jim Bolt, Jeremy Ballenger
and Tyler Carner of CBRE, which handled lease-up of HighField Building 3, are mar-keting Building 5.
“HighField Building 5 signi-fies the industrial momentum we are seeing in the south-east Denver market,” said Bolt. “This is the fourth speculative building constructed in the area over the past seven years, and the timing is appropriate by Bradbury Properties and Confluent Development to take advantage of the growing
interest in this location.”The approximately $10 mil-
lion project is expected to be completed by spring. “We do have several active prospects for the building currently,” Burton said.
HighField Business Park is being developed on land Bradbury’s family owned and farmed for 60 years.
“The opportunity to trans-form land that’s been in our family for decades into prop-erty that will give Colorado residents a place to work in a top location is very meaning-ful,” said Bradbury. “We are proud to team up with a great partner in Confluent Develop-ment to make HighField Build-ing 5 possible.”
HighField Business Park sits on an elevated site, and the buildings, attracting compa-nies including Polystrand Inc., Applied Controls, Colorado Studios, EdgeConneX and J.R. Butler, also set a high standard, said Bradbury. Intergroup Architects, which designed all the buildings at HighField, is the architect for Building 5.
Bradbury Properties and Confluent Development, which has developed nearly 3 million sf of commercial prop-erty in the southeast Denver market, formed a partnership to develop the remaining land at HighField earlier this year.
Bradbury, Confluent to build 100,000 sf
Developers of the 75-acre Denver Design District will convert a former showroom into 60,000 square feet of creative office space. A rendering by Davis Partnership Architects gives an idea of what build-out could look like. (See story on Page 7)
Designs on office space
Please see Glendale, Page 10
Please see Bradbury, Page 38
In this issue…
Staying overStarwood, often associated
with hotels, buys a $93.1 million apartment portfolio
InsuranceAllstate secures 70,273 square feet of
Class A office space in Lone Tree
Fastened upWith Empire Staple Co.,
Trammell Crow already has a build-to-suit user as it starts construction
Page 4 — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
by John RebchookWhen a lot of people hear the
name “Starwood,” it would be understandable if they think of hotels.
After all, Starwood Hotels and Resorts is the largest owner of hotel units in the country.
But Starwood Capital Group also is a big player in apartments.
In total, it has purchased 87,000 apartment units and condos nationwide.
Most recently, Starwood paid $93.1 million to the Holland Part-ner Group for a metro Denver portfolio.
The value-add portfolio includ-
Starwood acquires $93.1M in apartments
Great Wolf Resorts plans Colo. park
Great Wolf Resorts Inc. is expanding to Colorado.
North America’s largest family of indoor water-park resorts recently purchased a partially constructed hotel east of Interstate 25 and InterQuest Parkway in northern Colorado Springs, where it will finish work on the property – which has stood idle for nearly six years – and build an adja-cent water park.
Expected to open in late 2016, Great Wolf Lodge Colorado Springs will fea-ture more than 380,000 square feet of entertain-ment offerings and lodging amenities. The centerpiece of the resort will be a more-than-65,000-sf indoor water park, including a five-story funnel slide. Additionally, the property will include 311 guest suites that can accommodate at least six people, a variety of din-ing options and more than 20,000 sf of conference space.
“We are so excited to bring the Great Wolf Lodge brand to Colorado," said Kim Schaefer, CEO, Great Wolf Resorts Inc. “The addition of Great Wolf Lodge Colorado Springs will feature many of the amenities and activities our guests know and love, as well as several experiences new to our brand.”
Highlights
Canterra at Fitzsimons was one of the apartment communities purchased by Starwood.
This pool is one of the amenities at the 165-unit Silverbrook in Aurora.
Greater Denver
Please see Starwood, Page 10Please see Highlights, Page 14
Web site: www.crej.comPeriodicals Postage Paid at Denver, CO
Subscription rates: $85 – one year, $155 – two years
Single issue: $4 Back issues: $5Subscriptions are non-refundable
Published semi-monthly, the first and third week of every month.1600 Stout Street, Suite 1330, Denver, CO 80202
(303) 623-1148POSTMASTER: Send address changes to Colorado Real Estate Journal,
1600 Stout Street, Suite 1330, Denver, CO 80202.All rights reserved. No part of this publication may be stored,
reproduced, or transmitted in any form or by any means without the publisher’s prior written permission. All contributed articles published in the Colorado Real Estate Journal represent solely the individual opinions of the writers, and not
those of the Colorado Real Estate Journal.REPORT AN ERROR IMMEDIATELY
With apologies to Pliny the Elder—who uttered the words above in 67 A.D.—certainty can be a certainty. Our relationships with capital sources, coupled with our unparalleled experience in investment sales, mortgage banking and loan servicing, help us remove doubt from the equation. Perhaps it’s because the real estate market in ancient Rome didn’t amount to much, but we think our sages are way better than their sages.
a Berkshire Hathaway and Leucadia National companyB E R K A D I A .C O M / 8 0 0 . 4 4 6 . 2 2 2 6
Commercial mortgage loan banking and servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc. Investment sales and real estate brokerage businesses are conducted exclusively by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. In California, Berkadia Commercial Mortgage LLC conducts business under CA Finance Lender & Broker Lic. #988-0701, Berkadia Commercial Mortgage Inc. under CA Real Estate Broker Lic. #01874116, and Berkadia Real Estate Advisors Inc. under CA Real Estate Broker Lic. #01931050. For state licensing details for the above entities, visit: www.berkadia.com/legal/licensing.aspx.
Page 6 — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 7
by Jill Jamieson-NicholsThe developer of the Denver
Design District will transform a 60,000-square-foot show-room building into creative office space, setting the stage for office development in the evolving mixed-use, transit-ori-ented neighborhood between Broadway and Interstate 25.
“We’re looking to reposition this asset as a kind of sugges-
tion of where we’re going in the future,” said Chris Waggett of D4 Urban LLC.
The build-ing at 575 S. B r o a d w a y will offer wide-open,
sky-lit space with 24-foot ceil-ings. D4 Urban will begin gut-ting the interior next month.
The Denver Design District is a 75-acre development on the south side of Alameda Avenue in the emerging South Broad-way corridor, which is bud-ding with new restaurants and retailers, including two natural-grocery stores. Known for an iconic yellow sculpture on the south side of the property, fac-ing I-25, the design district cur-rently has two light-rail stations and 900,000 sf of space, includ-ing interior design showrooms, a major retail center – Broad-way Marketplace – and com-panies including Karsh Hagan
and Quest Diagnostics. While it is ground zero for
design showrooms, drawing interior designers, architects and builders from a seven-state region, the Internet is chang-ing that industry. Design show-rooms now are concentrated in two large buildings, which are 95 to 100 percent leased.
That paves the way for rede-velopment of 575 S. Broadway, which Kittie Hook, manag-
ing direc-tor of New-mark Grubb K n i g h t Frank, is marketing to users that are 20,000 sf and larger.
Over time, the Denver Design Cen-
ter will become a 10 million-sf mixed-use, live-work-play environment at downtown’s southern edge. A general devel-opment plan, urban design guidelines and a metropolitan district are in place, and the owners late last year bought out a distressed loan on the property.
The design district’s first new ground-up development – the Denizen apartments – has been wildly successful, delivering the market’s first LEED Plati-num units at the doorstep to the Alameda light-rail station. “The demand is insatiable. It’s unbelievable,” said Waggett, noting out-of-state renters are
leasing units off the Internet, sight unseen.
ValleyCrest Design Group is spearheading the district’s dense, urban design, which includes a future two-acre central park, a plaza for farm-ers markets and events, and a linear park along the light-rail line.
While very much mixed-use throughout, the plan concen-trates residential uses on the north, with office, including 1 million sf of new develop-ment, on the south, all inter-connected with surrounding neighborhoods, the Broadway and Alameda light-rail stations, bus and car routes, and bike/pedestrian paths.
“The way that bicycles move through this area is very criti-cal,” said ValleyCrest’s Eliot Hoyt, who noted a bike/pedes-trian bridge across the light-rail tracks to the former RTD bus barn, which D4 Urban has under contract for 360-degree transit-oriented development, will allow bike access between Broadway and the South Platte River Trail.
West Dakota Avenue will become a dense retail area, while East Center Avenue – which will become the 575 S. Broadway office building’s front door – will be re-ener-gized.
An effort to pursue LEED Platinum for Neighborhood Design certification is being contemplated – achieving it would make the Denver Design
District the largest Platinum ND in the world.
While, “Everything we do is signaling that the area is trans-forming and changing,” said Hoyt, the 575 S. Broadway building will be an “identity-changer.”
Design elements, a new entry or entries for tenants, and win-dows will be created along Center Avenue. Outdoor seat-ing areas also will be provided, helping activate the street.
“It really lends itself to a really cool, creative space,” said Hook, who anticipates interest from architects, engineers and tech-nology companies, for instance.
Asking rental rates are $20 to $24 per sf triple net, a consid-erable discount to downtown rates, yet the district is close enough for people to feel like they’re part of downtown, Hook said.
Waggett said the Denver Design District is a sort of south-ern version of Denver’s River North area, but with “better bones” because it’s adjacent to Broadway, across the street from West Washington Park and the Baker neighborhood and has two light-rail stations within a five-minute walk of anyplace on the property. In fact, much of the early interest in the 575 S. Broad-way office building is from ten-ants “feeling the heat” of rising rents/prices and limited vacan-cies in RiNo, he said.
“It (RiNo) is very appealing, but it’s pretty constricted. We think we offer a South Broad-way alternative to that for the right user,” Waggett said.
“I think anybody who comes here is going to come here because they understand the broader story.”s
Denver Design District adds creative office space to mix
A rendering by Davis Partnership shows a build-out scenario for the office space at 575 S. Broadway.
Page 8 — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
by Jill Jamieson-NicholsAllstate Insurance Co. has
leased a Class A office building in Lone Tree for a regional office.
Allstate will occupy Park Meadows Corporate Center II, a 70,273-square-foot building at 10002 Park Meadows Drive.
Ryan Stout, Nate Bradley and Zach Williams of Cushman & Wakefield of Colorado Inc. rep-resented the building owner, Zurich Asset Management. Jason Sheehy, Bob Whittelsey, Tom Hol-linden and Mike Cummings of Colliers International represented the tenant.
Sheehy said Allstate will relo-cate from Dry Creek Corporate Center in December as part of a redesign of its corporate office standards. “It was going to be really tough to do in place, in
phases,” he said, adding Park Meadows Corporate Center offered single-tenant space with signage and 6:1,000 parking.
The building’s former tenant, Sprint, moved out in March after 15 years. The building was con-structed in 2000.
Park Meadows Corporate Cen-ter II is part of the four-building Park Meadows Corporate Center campus. It is located a half-mile from the Lincoln light-rail station, near the intersection of Interstate 25 and the 470 beltway.
“The high-quality campus set-ting adjacent to Park Meadows Mall with world-class retail and restaurant amenities, combined with an unmatched six per 1,000 parking ratio, were significant features for tenants considering Park Meadows Corporate Center II,” said Stout.s
by Jill Jamieson-NicholsAn international software
company that recently leased the office space next to the Den-ver Art Museum for its head-quarters has leased the former Deep Rock bottling plant in Five Points.
Denver-based Four Winds Interactive leased the building at 2501 Welton St. in Denver from a family trust that acquired the property last year. The property, which will house technical sup-port, lab and warehouse opera-tions, contains approximately
26,000 square feet of leasable area. Four Winds also leased a nearby parking lot at 740 25th St.
Tenant finish is slated to be completed this fall, said Tom Welsh of Welsh Commercial LLC. Welsh and Chris Coble
of Black Label Real Estate LLC represented the landlord in the transaction. Chad Kollar and Rick Door of Cresa Denver rep-resented Four Winds Interac-tive.
Four Winds is a visual com-munications company whose products include digital sig-nage software. It recently leased the approximately 52,000 sf of office space at 1221 Broadway, below the new ART hotel, for its headquarters. It will move into that space, as well as the Welton building, in October.
Other Newsn Ventana Capital, through
an entity called FS LLC, paid $1.35 million for a 7,683-square-foot office building at 9801 E. Easter Ave. in Centennial. Ven-tana will occupy the building.
Dunfore Associates sold the two-story building, which was built in 2005. Valpak occupied the building at the time of the sale, but is relocating to Merid-ian International Business Cen-ter.
Allstate Insurance secures 70,372 sf for regional office
Software company leases former Deep Rock building
Allstate will occupy Sprint’s former building at 10002 Park Meadows Drive in Lone Tree.
Greater Denver
Four Winds Interactive leased the former Deep Rock bottling facility at 2501 Welton St. in Denver.
Page 10 — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
Greater Denver
rance Hunt, who listed, marketed and sold the portfolio with fellow ARA Newmark teammates Jeff Hawks, Doug Andrews and Shane Ozment.
Zeff had his office in that building for many years, Hunt said.
Blueline bought the Birch in November 2011, as part of the Carmel portfolio sale, he said.
Blueline purchased the Birch for $6.2 million and sold it for $14 million, according to pub-lic records. That equates to $198,527 per door and $135.39 per sf.
The other buildings in the portfolio sold are:
• Four Mile Flats, a 115-unit, four-story building that sold for $17.5 million, or $152,174 per unit and $171.82 per sf. Blueline purchased it in April 2014 for $8.7 million, according to records.
• Infinity Flats, a 117-unit building at 1045 S. Birch St. built in 1979 at 1250 S. Cler-mont St. They sold it for $17.2 million, or $147,009 per unit and $168.88 per sf. They pur-chased it in May 2011 for $6.35 million, records indicate.
• Vantage Point, a 115-unit, three-story apartment building built in 1965 at 1105 S. Cherry St. They sold it for $13.9 mil-lion, or $113,115 per door and $131.76 per sf. They paid $8.63 million for it in 2013, according to records.
• Park Point, a 61-unit, three-story building built in 1965 at 1045 S. Birch St. They pur-chased it for about $3.6 mil-lion in July 2013, according to records.
Hunt, who has known Reyn-olds since he graduated from college in the early 1990s, said he and Daniel saw potential for the area before anyone else.
“It has great access between the Denver Tech Center and downtown,” Hunt said.
“You have close proximity to light rail and you have all of the retail along Colorado Boulevard as well as in the
Cherry Creek Shopping Cen-ter and Cherry Creek North,” Hunt said.
There also is a tremendous amount of new restaurants and developments in Glendale itself, he said.
Indeed, there is a $175 mil-lion retail renaissance plan called Glendale 180, which was unveiled in April.
“The Glendale area is not as congested as Capitol Hill, where parking is just about impossible,” Hunt said.
“Parking is easy in Glendale and the units are bigger and less expensive,” Hunt said.
Reynolds and Daniel also cited all of the reasons that Hunt ticked off.
Hunt said that the two not only had great instincts, but also worked hard to make their investments pay off.
“These are the kind of guys you love to see succeed,” Hunt said.
“They are very hands-on investors,” Hunt said. “Steve was actually out there swing-ing a hammer.”
Hunt said there were about 10 “very strong” offers for the portfolio.
Reynolds and Daniel also said their equity investors were extremely pleased with their investments.
“The winning bid came in with a very aggressive price and the ability to pay cash,” Hunt said.
Earlier in the year, Arel Capi-tal had purchased an 80-unit building in Washington Park, which was a 1031 exchange in which the seller purchased the Wynkoop Brewing Co. building downtown and the Ale House at Amato in Lower Highland.
Hunt said the success of Blueline and a handful of oth-ers hasn’t gone unnoticed by other investors.
“Now, on just about every block in Glendale there is a building that is being rehabbed and repositioned,” Hunt said.s
ed two communities in Aurora and one in Thornton.
The portfolio consisted of:• The 188-unit Canterra at
Fitzsimons, opened in 1984 at 358 Potomac St. in Aurora;
• The 165-unit Silverbrook, which opened in 1985 at 15403 E. First Ave. in Aurora; and
• The 319-unit Montair at 8900 Grant St. in Thornton. It also was built in 1985.
The total sale price equates to $138,541 per unit and $151.48 per square foot.
The portfolio was listed, mar-keted and sold by Pam Koster and David Martin of the Denver office of Moran and Co.
“There was a lot of interest, both from buyers interested in the individual properties and buying them as a portfolio,” Koster said.
“We ended up with 20 offers,” with Starwood rising to the top, she said.
She said they required every bidder to make an offer for the
properties on an individual basis, as well as purchasing the trio as a portfolio.
“Interestingly, most of the buy-ers wanted to buy the entire port-folio,” Koster said.
She said slightly more than 60 percent of the prospective buy-ers were from out of state, with about 40 percent local buyers.
“For the most part, the majority
of the people already have a pres-ence in the Denver area and own properties here,” Koster said.
“Maybe two or three of the candidates had not bought here before and were new to the area,” she said.
Given the age of the three com-munities, they are ideal value-add properties.
“In this market, you always
have more investors chasing the value-add deals than the core properties.”
That is because on top of the yield they get, they have the opportunity to improve the units and make a much bigger return on those investments, she said.
“I’m guessing Starwood proba-bly will be investing about $5,000 per unit across the properties,” Koster said.
Starwood bought the commu-nities through a portfolio that targets value-add deals, she said.
“No. 2, Starwood likes to buy these bigger portfolio deals,” which gives them an immediate critical mass, she said.
“Honestly, they are trying to put their money to work in chunks, typically $50 million and above, and not the small, build-ing-by-building acquisitions,” Koster said.
The demographics also are strong for the properties.
For example, Montair, near Interstate 25 and West 88th Ave., has a daily traffic count of 166,000. Canterra, near Interstate
225 and East Sixth Avenue, and Silverbrook, near East Sixth Ave-nue and Chambers Road, have daily traffic counts of 40,000 and 31,000, respectively.
In addition, the average sf of a unit at Montair is 995 sf, 21.8 percent bigger than the typical size of an apartment unit in the area. At Silverbrook, the average size of a unit is 908 sf, about 10.5 percent bigger than a typical unit in the Fitzsimons area, according to research by Koster and Martin.
Other Newsn Meritage Homes paid $4.25
million for 36.6 acres of land at the northwest corner of West 122 Avenue and Quebec Street in Thornton.
Meritage can build 135 homes on the property.
The seller was Midwest Build-ing Professionals LLC.
Fuller Real Estate brokers Bob Leino and Andrew Dod-gen represented the seller in the transaction.s
Glendale
Starwood
Continued from Page 1
Continued from Page 4
Park Point was part of the Glendale portfolio that was listed and sold by ARA Newmark.
Infinity Flats was one of the buildings sold by Blueline.
The Montair in Thornton, the largest of the properties purchased by Starwood, has 319 units.
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 11
Page 12 — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
Boulder County & U.S. 36 Corridor
by Jill Jamieson-NicholsCompetition for a
37,655-square-foot office build-ing in Lafayette drove the price to $5.91 million, $155,000 over the asking price of $5.75 mil-lion.
There were multiple offers for Millennium Plaza, a three-story, multitenant building that sold to the Mental Health Center of Boulder County. The property is located at 1455
Dixon Ave.“The build-
ing was 100 percent leased, and what they plan to do is let the leases and the options expire over time and
occupy the building as it vacates,” said Scott Dale of
Scottsdale Properties, who list-ed the building for seller Oliver A. McBryan.
Dale said Boulder County investors competed for the property because, “It was a really nice, well-managed building, and it was 100 percent leased with a solid rent roll.” Tenants include CRMCulture, a software company that occu-pies 6,793 sf; Adult Care Man-agement Inc., which has 4,280 sf; and Interim HealthCare, a 3,552-sf tenant.
Chris Boston and Michael-Ryan McCarty of Gibbons-White Inc. represented the buyer in the transaction.
Scottsdale will continue to manage the building for the new owner. “We have really enjoyed working with the leadership team of the new ownership group,” Dale commented.s
Competition drives price for Millennium Plaza to $5.91M
Millennium Plaza in Lafayette sold for $155,000 more than the asking price.
Scott Dale
by Jill Jamieson-NicholsA 60-unit apartment building
on Canyon Boulevard sold to a Boulder group that plans an approximately $2 million mod-ernization.
A group comprised of Scott Holton and Chris Jacobs of Ele-ment Properties, along with Neil Littmann and Scott Reichenberg of Signature Partners, paid $9.71 million, or $161,835 per unit, for the four-story building at 2121 Canyon Blvd. in Boulder. The apartments were 100 percent leased.
Village Partnership was the seller.
Holton said the new owners will undertake a substantial reno-vation later this year to modernize the apartments, provide greater energy efficiency to comply with Boulder’s SmartRegs program, add bike storage and pet facilities, and “create a unique and mod-ern downtown apartment experi-ence” while maintaining market rents that serve residents with incomes of around 80 percent of area median income.
Holton said, “2121 Canyon rep-
resents a rare opportunity for the renovation and preservation of 60 existing market-rate affordable apartments in downtown Boul-der. We will continue our model of providing cool apartments in a walkable location with great architecture and design that are also pet-friendly, energy-efficient and emphasize a walking/biking lifestyle.
“Current rents are well below market – approximately $1 per square foot per month – despite the apartments being very clean and well-maintained,” said Holton. “So we feel that some modernization of the apartment finishes and common areas will go a long way in providing a bet-ter value for residents in exchange for bringing rents a little bit more in line with the market.”
The property currently is called Canyon Villa, but the name most likely will be changed. Villa Part-nership, represented in the trans-action by Dylan Lario of Coldwell Banker, sold the property, which is midway between Broadway and the Boulder Turnpike. The building was constructed in 1968.s
Canyon Blvd. apts. to be modernized following $9.71M sale
The apartments at 2121 Canyon Blvd. will be renovated later this year.
by Jill Jamieson-NicholsFresca Foods signed a long-
term lease for 49,570 square feet of space it occupies near its Louisville headquarters. The space will be converted to a food manufactur-ing facility.
Fresca has subleased the space, located at 1775 Cherry St. in the Colorado Tech Center, for the last five years. It currently uses the space as a warehouse. With the sublease expiring, landlord Etkin Johnson Real Estate Partners agreed to a new lease that includes state-of-the-art build-out for food manufacturing. Fresca Foods will move out of the building until the improvements are completed early next year.
Neil Littmann and Scott Reichenberg of The Colorado Group represented the tenant in the transaction.
Fresca Foods’ headquarters are
located nearby in 69,195 sf at 195 CTC Blvd. The natural foods com-pany occupies nearly 115,000 sf in the Colorado Tech Center, plus 158,000 sf at Majestic Commer-center in Aurora.
“The Colorado Group was hon-ored to continue our long-term relationship with the incredibly professional management team at Fresca Foods. It’s great to see this company continue to grow their operations, and we are proud to be part of their success,” said Littmann.s
Fresca Foods warehouse to be converted to production
Fresca Foods’ space at 1775 Cherry St. will be built out for food manufacturing.
‘It’s great to see this company continue to grow
their operations, and we are proud to be part
of their success.’ – Neil Littmann, The Colorado Group
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 13
Larimer & Weld Counties
by Jill Jamieson-NicholsA Fort Collins manufacturing
building will be converted to office space after being acquired by a local investor for $3.66 mil-lion, or $91.36 per square foot.
The former Value Plastics building at 3325 Timberline Road will deliver 25,000 sf of office space to the market, which has seen little new office develop-ment in the current commercial real estate cycle.
“This transaction demonstrates the real need today for high-quality office space in southeast Fort Collins,” said CBRE Senior Vice President Peter Kast, who represented buyer RPM Timber-line TNC LLC with CBRE’s Pete Kelly. “Our client recognized the value of this property’s excellent location and the potential it has to become successful office space with its high ceilings and abun-dance of natural light.”
The 40,062-sf building’s trans-formation into multitenant office space is expected to start Nov. 1 and be completed by the end of
Office space to be created atformer manufacturing facility
Value Plastics’ former building will become office space.
by Jill Jamieson-NicholsDemand for commercial real
estate in Northern Colorado has pushed vacancy rates below 5 percent for every product type and, in some cases, to their lowest levels in years.
DTZ’s second-quarter Market Snapshot report says the vacancy rate for office space dropped to 4.9 percent in the first quarter, its low-est level since 2001. Retail vacancy, also 4.9 percent, has been below 5 percent for the last three quarters, setting historical lows for North-ern Colorado. Industrial vacancy is 4.77 percent, and multifamily vacancy is next to nonexistent, 1.6 percent.
Cutbacks in the energy sector don’t appear to be hurting the market, DTZ said. If there is an issue, it is meeting demand from employers for quality commer-cial real estate space, according to Jason Ells, vice president in DTZ’s Fort Collins office.
“The Northern Colorado com-mercial real estate market remains very vibrant. Demand for high-quality space continues to remain strong, and our region continues to be a nationally recognized lead-er in innovation and a desirable place for families and business to locate. The challenge we face as we finish 2015 and look toward 2016 is a lack of existing options for primary employers and the growing cost of constructing new facilities,” he said.
“Businesses ultimately have a certain level of occupancy cost they can afford, and the fear is that we are pushing that envelope with new facilities. This cost vs. avail-ability dilemma will continue into the foreseeable future, making cre-ative repurposing, public-private partnerships and other unique methods of delivering product to the market as important as ever.”
Ells said there are a variety of sites around the region where new office product is planned, designed or permit-ready, but increased construction
costs have stifled construction. “The economic rent required by developers based on these increased costs is 25 to 30 percent higher than achievable market rent, and until that gap narrows, office development will likely be constricted to primarily owner-user projects,” he said.
DTZ’s second-quarter report shows the average office rent, $18.37 gross, was up 25 cents per sf in the first quarter but was 15 cents per sf lower than in the sec-ond quarter of 2014. Ells says that is a function of high-quality space having been absorbed. “With now a lower inventory in the market and less of that inventory consist-ing of Class A space, the overall asking rents have fallen slightly. This is not a poor reflection on the market at all, but rather a sign of strength as demand remains strong for well-located, high-qual-ity space, and tenants are willing to pay a premium for it.”
The same is true for retail prod-uct, he said. Rates average $13.08 per sf triple net, 19 cents more than in the first quarter but slight-ly below the historical average of $13.18 per sf.
There will be some overlap of retailers with the opening of the Foothills Mall redevelopment in Fort Collins starting later this year, but Ells said in general “the mall will not take another slice out of the pie but rather make the pie bigger.” One of the things the
city hopes the redevelopment will reverse is leakage of sales-tax dol-lars out of the city.
“Ultimately we see the reopen-ing of the Foothills Mall as a rising tide that will bolster sales for the market as a whole as its custom-ers spill over to options that are downtown, along Harmony Road or located along the midtown cor-ridor,” said Ells.
Another major Northern Colorado retail project will be a 250,000-sf Scheels “retail adven-ture” store slated to break ground at Interstate 25 and U.S. Highway 34 in Johnstown early next year. The mall and Scheels will add as many as 1.2 million sf of retail to the Northern Colorado market.
More than 2,000 apartment units are under construction in North-ern Colorado, and asking rent is at an all-time high of $1,074 per unit, according to DTZ’s Market Snapshot. A more detailed DTZ Snapshot report on the multifam-ily market reports rents at $1,173 per unit in Fort Collins and Love-land and $882 in Greeley, whose vacancy rate was 1.1 percent at the end of the second quarter. Fort Collins’ vacancy rate was 1.8 percent, and Loveland stood at 2.7 percent vacancy.
In addition to units under construction, more than 2,900 apartment units are proposed or planned. DTZ projects rental rates will continue to stabilize with increased development and low salary growth, vacancies will continue to climb slightly despite “surprising” absorption and sales of apartment communities will increase.
Northern Colorado’s unem-ployment rate dropped to 3.9 per-cent in the second quarter, slight-ly lower than the state average (4.4 percent) and well below the national average (5.3 percent). s
NoCo vacancies drop; costskeep new construction down
Page 14 — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
the year. Tenants from 3,000 to 25,000 sf could be accommodat-ed. The owner, which is affiliated with The Neenan Co., plans to occupy the balance of the space.
The location is close to the King Soopers shopping center and down the street from Poudre Val-ley Hospital and the Harmony Road corridor, with its numerous retail amenities and restaurants. It’s also 10 minutes from ameni-ties and government offices in
d o w n t o w n Fort Collins and offers quick access to Interstate 25.
Kast said the property makes sense for office vs. i n d u s t r i a l use because there are more
affordable locations for manufac-turing, and Timberline isn’t ideal for truck traffic. “Timberline is a great office corridor,” he said.
Value Plastics, which manufac-tures plastic tubing components for medical use, is leaving the space to expand to a new, larger property in north Loveland.
Jeff McClintock of Newmark Grubb Knight Frank represented the seller, a Denver investment group called 3325 Timberline Road LLC.
Other Newsn Diesel Services of Northern
Colorado, which repairs and ser-vices trucks, trailers and indus-trial equipment, is increasing its presence in the market with the $1.39 million acquisition of a 11,400-square-foot building with
two acres of yard in Johnstown.“The demand is there,” said
owner Marybeth Synder, who said the company is growing and turnaround time is of utmost importance to her customers. “We thought it would improve our turnaround time a little bit if we had more people and more space,” she said.
Diesel Services will continue to operate its facility on Mulberry Street in Fort Collins, but the Johnstown location will be more convenient for customers who drive from Berthoud, Longmont and surrounding locations.
Just completed, the building features 8,400 sf of warehouse and 3,000 sf of office build-out. Craig Hau, formerly of Sperry Van Ness/The Group Commer-cial LLC and now a commercial broker with The Group Inc., rep-resented the buyer, Wapiti Hold-ings CO LLC, and seller, Panilolo LLC.
n CFR Investments LLC pur-chased a 30-unit apartment prop-erty at 1745, 1753, 1757, 1761, 1765 and 1773 30th St. in Greeley for $2.38 million.
Arkadia LLC and Tiny Proper-ties LLC sold the apartments.
Brian Mannlein and Cole Herk of DTZ represented the seller. Alex Schuman of Schuman Cos. represented the buyer.
n Erdmann Land Manage-ment LLC paid $1.03 million for 3.95 acres of land directly north of Thunder Mountain Harley-Davidson, along Interstate 25 in Loveland.
Jake Arnold of Brinkman Part-ners represented the seller, In Kahoots LLC.
n The town of Berthoud sold
8.6 acres of land behind Berthoud High School to Thompson R2-J School District for $705,000. The school district bought the land in case it needs to expand in the future, said Jack Trethewey of Berkshire Hathaway HomeSer-vices Rocky Mountain, Realtors in Loveland.
“It was a good sale for the town. It was a great purchase for the school district,” said Trethewey, who represented the school dis-trict. Trethewey said there was a lot of interest in the proper-ty, which was listed by Nathan Kline of Loveland Commercial and was zoned for multifamily development.
n Team Industrial Services Inc. leased 10,400 sf of industrial space at 4370 Woods Ave. in Loveland.
Patrick O’Donnell of Realtec-Loveland handled the transac-tion.
Ward East Ltd. LLP is the land-lord.
n Total Renal Care Inc., an affil-iate of DaVita Healthcare Partners Inc., leased 8,080 sf of flex space at 1601 Prospect Parkway, Suite 180,
in Fort Collins.Terri Hanna of WWR Real
Estate Services LLC represented the landlord. Debbie Lachlan of Newmark Grubb Knight Frank represented the tenant.
n Knowledge Universe Edu-cation LLC leased 6,455 sf of space at 4059 W. 11th St. in Greeley to Tendercare Learning Center LLC.
Gage Osthoff of Realtec-Gree-ley handled the transaction.
n Spruce Top LLC leased 4,125 sf of industrial space in Fort Col-lins to Rainbow International of Northern Colorado.
The property is located at 5837 Wright Drive, Unit 1.
Steve Stansfield of Realtec Commercial Real Estate Servic-es was the listing broker. Perry McCormac of McCormac Real Estate represented the tenant.
n Holiday Horror LLC leased 3,600 sf of retail space at 109 E. 22nd St., Units 2 and 3, in Greeley. Forest Equity Partners LLC is the landlord.
Gage Osthoff of Realtec-Greeley handled both sides of
the transaction.
n Morrison-Shores LLC pur-chased 3,385 sf of office space at 375 E. Horsetooth Road, Building 3, Suite 101, in Fort Collins for $600,000, or $177.25 per sf.
Wire Force LLC was the seller.Annah Moore of Realtec Com-
mercial Real Estate Services han-dled both sides of the transaction
n Jeff and Brenda Doran paid $260,150, or $57.81 per sf, for a 4,500-sf industrial property at 211 Versaw Court in Berthoud.
Doran, a broker with Realtec Commercial Real Estate Ser-vices, represented the couple in the transaction. Suzan Gruman of Re/Max represented the seller, 211 Versaw Court LLC.
n Imago Enterprises pur-chased 3.86 acres of land on Tri-angle Drive in Fort Collins as an investment. Musick Family Trust sold the property for $230,000 cash.
Bill Reilly of Sperry Van Ness/The Group Commercial handled the transaction.s
Fort CollinsContinued from Page 13
CBRE Hotels, along with Gar-field Corp., an affiliate of Gar-field Public/Private LLC, based in Dallas, completed an exhaus-tive search in the region to locate an ideal market and property for the Great Wolf Resorts business model and represented it in the acquisition of the property once proposed to be a Renaissance Hotel.
“Great Wolf Resorts has an outstanding reputation as a regional destination in the mar-kets in which they operate, and the partially built 300-room hotel provides the perfect framework for the next high-quality Great Wolf Lodge and water park. The combination of the exception-al amenities and attractions in Colorado Springs and a Great Wolf Lodge water park experi-ence will create an excellent des-
tination experience just over one hour from Denver,” said Mark Darrington with CBRE Hotels.
Garfield Corp. engaged Dar-rington and Larry Kaplan, senior vice presidents for CBRE Hotels, to assist in its efforts to locate markets and properties regionally on behalf of Great Wolf Resorts.
The Colorado Springs loca-tion will be the 14th Great Wolf Lodge resort.s
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 15
by Jennifer HayesGriffis/Blessing Inc. is taking to
new heights its newly acquired Colorado Springs apartment community.
The firm paid $22 million, or $124.53 per square foot, for the Union Heights Apartments, a 220-unit property at 4770 Night-ingale Drive, where it already has initiated capital and operational improvements.
“Union Heights is poised for rent growth. Our proven value-add capital improvement plan
will give us the opportuni-ty to showcase the commu-nity’s poten-tial,” said Gary Winegar, president of inves tment services for Griffis/Bless-ing. “Investors
will benefit from these enhance-ments by seeing immediate cash flow while residents will begin to enjoy a higher quality of apart-ment living.
“We’ve been doing value-add deals since 1985; it’s our forte, we know how to do it,” he con-tinued. “Union Heights is right in our backyard; it is centrally located in a submarket that does well. There were a lot of things we liked about the asset.”
Colorado Springs-based Griffis/Blessing plans to enhance building exteriors; upgrade the clubhouse and related amenities; improve landscaping; renovate the pool area; and revamp on-site management services to better meet residents’ expectations.
Improvements are expected to be complete by year-end. Griffis/
Blessing also plans to improve unit interiors as apartments turn over.
“The community offers poten-tial residents an affordable place to live while situated in a highly desirable location, near the inter-section of Academy and Union boulevards, allowing for conve-nient access to everyday needs from grocery shopping and edu-cation to retail shopping and entertainment,” added William J. Hybl Jr., president and chief oper-ating officer of Griffis/Blessing.
Constructed in 1984, Union Heights comprises one- and two-bedroom units that average 803 sf. Community amenities include a swimming pool, barbecue grill-ing station, clubhouse with a business center, theater room and fitness center, and views of Pikes Peak and the Front Range.
At the time of sale, Union Heights was 94 percent occupied.
David Potarf, Dan Woodward, Matt Barnett and Jake Young of CBRE listed the property for sell-er Holland Residential, part of the Holland Partner Group. Union Heights Apartments was part of
a larger portfolio of properties in Colorado Springs and metro Denver that Holland is selling.
Brady O’Donnell of CBRE arranged the financing.
The acquisition of Union Heights Apartments represents Griffis/Blessing’s first multifam-ily purchase in Colorado Springs this year, as the company recently has been in disposition mode. However, the acquisition likely won’t be its last in 2015, as it cur-rently is looking to go under con-tract on an apartment community in metro Denver and is working on another potential acquisition in Colorado Springs, added Win-egar.
“Our goal is to be buyers.”Griffis/Blessing, which also
has offices in Denver and Boise, Idaho, currently manages more than 4 million sf of commercial space and more than 8,500 apart-ment units and owns upward of 3,000 apartment units.
Molly Markel, district manager for Griffis/Blessing, will manage the community with day-to-day operations led by on-site prop-erty manager Christina Musell.
Other Newsn Colorado Springs’ office mar-
ket saw another positive quarter – a trend Quantum Commercial Group Inc. expects to continue
for the balance of the year and into 2016.
Net absorption for the overall Colorado Springs office market
Colorado Springs/So. Front RangeGriffis/Blessing pays $22 million for Union Heights
The 220-unit Union Heights Apartments sold for $124.53 per square foot. The 1984 community “poised for rent growth” is undergoing a value-add capital improvement plan.
Page 16 — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
Finance
by John RebchookIt’s a great time to refinance a
retail project. If you don’t believe it, just ask
Michael J. Salzman.Salzman, a vice president of
loan production at the Essex Financial Group in the first half of the year, refinanced more than $100 million in debt on about a half-dozen retail projects.
Together, they have about 750,000 square feet. They range in size from 42,000 sf to 310,000 sf. The properties were 10 to 20 years old.
Most of them were along the southeast corridor or in the southwest part of the metro area.
They included grocery-anchored centers, power centers and neighborhood centers.
One, a power center in Lit-tleton, has a grocery-anchored component. One center was in Seattle.
“The majority, over 90 percent, were local,” Salzman said.
More than half of the loans were made by life insurance companies and the others were commercial mortgage-backed securities loans.
A lot of 10-year, CMBS loans were made by Wall Street in 2005 and 2006, before the financial meltdown occurred, Salzman said.
“2005 and 2006 and even 2007 were big years for debt origina-tion and we all know what hap-pened after that,” Salzman said.
Owners who were able to hold on to their properties during the Great Recession couldn’t ask for a better time to refinance, con-sidering how low rates are today.
Salzman refinanced the prop-erties from “the high 3 percent range to the mid-4s,” he said.
That was below the initial rates.The rates range from the high 3
percent range to mid-4.5 percent.“The rates they locked in from
2005 to 2007 were certainly high-er,” Salzman said.
He said many of today’s retail property owners would rather refinance their properties than sell them.
It is especially difficult to find other properties in 1031 exchang-es in order to defer capital gain taxes on the sale, he noted.
“Of course, it really depends on the long-term strategy for the asset and the borrower holding
period,” Salz-man said.
H o w e v e r, he said that given the owners may want to sell the asset at some point, the interest rate is not the only consider-
ation.“Part of the consideration is the
prepay structure,” Salzman said.“A lot of borrowers want the
prepay flexibility,” in order to avoid paying a penalty if they do decide to sell, he said.
That is especially important for value-add investors that are buy-ing older retail properties with the idea of renovating them, sta-bilizing the rents and tenants and then selling the properties, he said.
A decade ago, when Wall Street financed many retail deals with CMBS loans, many borrowers were unhappy with the service they received from them.
Essex, he noted, now offers ser-vicing of loans.
“That is one-stop shopping for borrowers,” Salzman said.
“Essex currently is servicing $4 billion in loans,” he said. Most of it is currently for life insurance loans, but increasingly it also is servicing CMBS loans, he said. Essex and other companies pro-vide servicing both for loans that
they place, as well as third-party loans.
Salzman does not see any slow-ing of lender interest in retail properties in the Denver area.
“Lenders are being very aggressive right now,” Salzman said.
“They have plenty of money to lend,” he said.
At the same time, lenders are not just throwing money at deals, the way they were before the financial meltdown.
“They are being very judicious about the deals they are doing,” Salzman said.
For example, if the loan rep-resents a large amount per sf, it must be justified.
Lenders also look at rent rolls carefully.
Lenders tend to like it when current tenants have a number of years left on their leases, because that provides a stable cash flow, he said.
However, at the same time, owners have an opportunity to replace existing tenants with ten-ants that will pay more rent, he said.
“It’s a double-edged sword,” Salzman said. “There is an opportunity there, but lenders don’t like the uncertainty from a big rollover risk.”
Part of his job in those cases is to provide information on the impact of tenants leaving.
“We will really dig in and explain the market to lenders so they understand who the likely replacement tenants will be and what the potential new lease rates will be,” Salzman said.
Other Newsn Dale Stewart and Mark
Lindgren, a vice president and investment analyst, respectively, of the Denver office of North-Marq Capital, arranged $3.3 mil-lion in permanent financing for the Saddle Rock Self-Storage at 6950 S. Gartrell Road in Aurora. Constructed in 2012, the facility has 400 self-storage units con-tained in 10 buildings.
Stewart and Lindgren arranged the financing for the borrower through NorthMarq’s corre-spondent relationship with a life insurance company.s
Salzman from Essex inks $100 million in retail financing deals
Michael J. Salzman
‘Lenders are being very aggressive right now. They have plenty of money to
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 17
Finance
T he real estate finance markets are as healthy and active as they have
been anytime over the past three decades. Life companies are get-ting their fair share of business and have been concentrating on the higher-quality, low-leverage deals secured by solid, well-per-forming properties. The commer-cial mortgage-backed securities lenders are filling their buckets with higher-leverage loans that are won with more aggressive underwriting, longer amorti-zation periods and potentially accepting greater levels of risk. Banks and credit unions also continue to be active in financ-ing commercial real estate due to their low cost of capital but usu-ally require some level of personal recourse.
But, as in all markets, there are those properties that do not meet the standards of these three major sources of capital for income pro-ducing real estate, which has led to the formation of several funds dedicated to providing shorter-term loans to enable property owners to manage their projects to a point where they can qualify for more traditional long-term debt. These groups are now commonly known as bridge lenders. This source of capital typically has come from private entities that are seeking higher yields and are will-ing to assume the greater risk that is associated with properties that have high vacancy, significant dif-fered maintenance and/or pend-ing tenant turnover. These lenders will provide funds for note pur-chases, discounted payoffs and rehab opportunities as well. They do not answer to state or fed-eral regulators and therefore don’t have the capital reserve require-ments that life companies and banks have to adhere to. They are not selling their loans into securi-tized pools that are scrutinized by bond investors that dictate many of the terms required in the CMBS world.
The bridge funds are look-ing at deals in the $3 million to $50 million range and in some cases higher. Some of the CMBS loan provid-ers also offer bridge loans as a vehicle to getting these p r o p e r t i e s into their lon-
ger-term securitization pools but generally are not promoting their short-term programs as stand-alone situations. If a property in their judgment is really on the verge of stabilization they will use this bridge ability to capture that business. These interim loans can be nonrecourse in many cases but may also include personal liability if deemed necessary.
The typical private firms with bridge programs are in it for yield. They have the ability to structure loan terms around the particular shortcomings of a property and are comfortable with the associ-ated risks. There are no off-the-shelf terms for most deals. They can structure around occupan-cy issues by setting aside cash reserves to fund tenant finish and leasing commissions, interest shortfall and any capital improve-ments that may be needed. They are usually willing to set an initial loan term of two to five years and often include extensions of one or two years if needed. They usually prohibit prepayment for the first year of the loan term and then are completely open without penalty thereafter. The price for all of this can range from 6 percent to over 15 percent on a fixed-rate basis depending on the level of risk. Variable interest rate structures are usually priced over LIBOR at spreads from 3 to 8 percent.
Some of the other advantag-es offered by these sources are
speed of closing and sometimes no need for an outside MAI appraisal. In a situation where another lender fails to close on a loan and a borrower has to quickly find a replacement lend-ing source, many of these bridge funds can close in less than two weeks. They do normally need a property condition report and a Phase I environmental report but have engineering companies that they use and can turn these around in a week. They tend to be able to assess and underwrite deals quickly and know very well when a property fits their criteria.
Another aspect of these pro-grams relates to the total loan to value or cost that bridge lenders are willing to offer. Since every deal has a unique set of char-acteristics, the level of loan can also be driven by the cash equity contribution and ultimate value creation. The goal is to be repaid by the eventual refinance of the property through traditional insti-tutional sources as mentioned previously as opposed to a sale. The bridge lender’s exit strategy is to be paid off by a new loan, as the sale of the property is the profit bonus for the borrower.
When first approached by a bridge lender, the initial reaction is that the interest rate seems rela-tively high. In most cases, this reflects the additional risk relat-ed to the problems that need to be solved and with the overall improvement in the operations, income and value, the interest rate is often more than offset when the loan is refinanced. The strategy is to find these value-add opportu-nities and use bridge financing to achieve your goals.
There is definitely a place in today’s market for this interim financing vehicle that will go where banks fear to tread. Most banks will not take the kind of risks that bridge lenders assume in nearly all of their transactions, so they do fill a large void in the real estate finance market.s
Bridging the gap in commercial RE
Mike JeffriesPrincipal, Essex
Financial Group, Denver
Carole Schumacher of BRC Real Estate represented Dun-fore Associates in the sale. Liz Morgan of The Morgan Firm LLC represented the buyer.
n EJ California LLC paid $1.07 million for a 30,890-sf
office building at 2950 S. Jamai-ca Court in Aurora.
Jamaica Court LLC sold the property. Mary Jo Cummings of API Sheldon-Gold Realty represented the seller.
n Hydro Gate, a subsidiary of the Henry Pratt Co., leased 7,015 sf of office space at 12000
E. 47th Ave. in Denver. The space will house the compa-ny’s administrative and sales offices.
Carole Schumacher of BRC Real Estate represented the landlord, an affiliate of North-star Commercial Partners. Bill Trinen of Trinen Realty Part-ners represented the tenant.s
was 80,165 square feet – boost-ing a year-to-date total of 176,330 sf. By comparison, the total net absorption was a negative 25,571 sf for 2014.
Quantum Commercial expects to see more positive absorption in the remainder of 2015 and 2016, according to the report.
The office vacancy rate dropped to 11.6 percent at the end of the second quarter, down from 12.2 percent at the end of 2014. The vacancy rate has fol-lowed absorption closely and will continue to do so with limited new space being developed in the near term.
Quantum Commercial noted in
its report that although not yet fully reflected in its numbers, the amount of square footage being constructed and acquired for the “new corporate structure of med-icine” is noteworthy. The firm pointed to the evolving dynamic medical practices that will be acquired and managed and will change the current model of med-ical office property acquisitions.
Regional, national and global companies like Centura, DaVita and UCHealth are impacting the local medical office market while development companies like Boldt have expanded in the mar-ket and are working collabora-tively with groups like the YMCA to create a hybridized wellness facility.
The firm reported this rapidly changing landscape is having a positive effect on office market indicators, which will likely con-tinue into the future.
Quantum Commercial fore-casts steady, moderate growth in the Colorado Springs office mar-ket in 2015 with stronger growth in the next couple of years; how-ever, the addition of new jobs is what is needed to fuel positive absorption and occupancy rates.
The office market report was part of Quantum Commercial’s overview of the Colorado Springs commercial real estate market in the second quarter and included reports on the retail, multifamily, industrial, investment and land sectors. s
BRC
Springs
Continued from Page 8
Continued from Page 15
For Company Profiles, Contact Information & Links, Please Visit www.crej.com
Commercial Real Estate
Lenders Directory
CO
MM
ER
CIA
L R
EA
L E
ST
AT
E L
EN
DE
RS
DIR
EC
TO
RY
If you would like to include your firm in this directory, please contact Jon Stern at 303-623-1148 or [email protected].
Page 18 — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
Law & Accounting
I f you’re in the business of redeveloping older buildings and aren’t
aware of federal and state incentive programs surround-ing the rehabilitation of his-toric structures, you could be missing out on key financing opportunities for your project. By combining both the Fed-eral Historic Tax Credit and the newly authorized State Reha-bilitation Credit, a developer has the potential to help fund as much as 45 percent of his project’s cost through income tax credit incentives.
While the 10 percent and 20 percent Federal Historic Tax Credits have been available for a number of years, Colo-rado House Bill 14-1311, oth-erwise known as the Colorado Job Creation and Main Street Revitalization Act, has recently authorized an increased state income tax credit for expendi-tures related to the rehabilita-tion and preservation of histor-ic buildings. Supporters of the new bill, including Reps. Leroy Garcia and Tim Dore, as well as state and private preservation offices, saw a unique oppor-tunity to create more jobs here in Colorado, while also pro-moting local development of projects that might otherwise be invested in other states with larger incentive programs.
Previously, the state tax cred-it was capped at $50,000 per project, but the new act autho-rized up to a $1 million credit for rehabilitation projects. In total, the new act authorized $35 million of tax credits over the next four years, with the intention that these projects will not only help to bring new life to historic structures and landmarks, but also will create jobs in towns and cities across the state.
In order to prevent a small number of projects from taking all of the credits, safeguards were put into place to ensure that projects both big and small are given the same opportunity to receive the state income tax credits. First, the $35 million of tax credits are broken down to specific tax years. The total allocation of these credits for 2016 is $5 million, with $10 mil-lion being allocated to each tax year 2017 to 2019. From there,
the tax cred-its are further divided into two pools based on project size. The first pool is for smaller r e h a b i l i t a -tion projects with project-ed qualified r e h a b i l i t a -tion expen-ditures, or
QREs, of less than $2 million. The second pool is for larger projects, which would have projected QREs over $2 million. The amount of state tax credits that are allocated to each pool are split 50-50 based on the authorized credits for the year. In 2016, each pool has $2.5 mil-lion of credits available, and in 2017 to 2019 each pool has $5 million of credits available.
As with many government-regulated initiatives, there are of course hoops to jump through and guidelines to fol-low. The building being reha-bilitated must be at least 50 years old and must be desig-nated as a historic structure by the National Park Service, History Colorado or a local landmark preservation com-mission. In an effort to help streamline the application pro-cess, the state has created an application that is completed and submitted online. This application can be found on the www.advancecolorado.com website, along with up-to-date information about the credit, such as the amount of credits that have been applied for and the amounts already reserved. It’s important to note that even if the total amount of state credits for the year have already been applied for or reserved, it is still beneficial to apply as soon as possible. Once all of the yearly credits are reserved, the remaining appli-cants go on a waiting list for the next year’s credits. Appli-cations can stay on the waiting list for up to two years, after which point their application expires and they must reapply if the credit is still available.
As for the calculation of the state tax credit, it works similar to the federal historic tax credit
program; the credit is the product of the amount of QREs put
into a project times the credit percentage. The amount of the Colorado income tax credit is equal to 25 percent of QREs spent up to $2 million, plus 20 percent of QREs spent over $2 million, with a maximum credit of $1 million that can be claimed by any one project. For projects that are in an area that has been declared a state and/or federal disaster area within the last six years, an additional credit of 5 percent is available, increasing the percentages to 30 percent of QREs spent up to $2 million, plus 25 percent of QREs spent over $2 million.
Generally speaking, QREs are expenses that are direct-ly related to the repair or improvement of the historic structure, including architec-tural features. In addition to the hard costs of rehabilitation, soft costs such as construction period interest and taxes, pro-fessional fees for engineers and architects, and even developer fees are all considered QREs eligible for the credit. Another important note is that if apply-ing for a credit of $250,000 or more, an audit of the project’s QREs is required by a certified accountant.
If project costs are incurred before the credits are applied for or reserved, they may still qualify as eligible QREs. As long as the costs are incurred after July 1, 2015, and meet the definition of a QRE, the status of the credit application isn’t a factor in determining whether an expense is eligible for the credit.
If excess QREs are spent dur-ing the rehabilitation project, the state will only issue a cer-tificate for the amount of cred-its previously applied for and reserved. The applicant must apply again for the additional expenses, and if funds are still available for the year, the cred-its are automatically approved and the applicant is issued a second credit certificate for the excess costs. If the applicant does not spend as much on the
Tax credits: Reviving Colorado, one historic building at a time
Kerry RoetsTax manager, Anton Collins Mitchell LLP,
Denver
Joseph SaldibarArchitectural services
manager, History Colorado, Denver
Please see Law, Page 34
1 8 0 0 A T T O R N E Y S | 3 7 L O C A T I O N S W O R L D W I D E ˚
THE TABOR CENTER | 1200 17TH STREET, SUITE 2400 | DENVER, CO 80202 | 303.572.6500
G R E E N B E R G T R A U R I G , L L P | AT T O R N E Y S AT L AW | W W W. G T L AW. C O M
Helping hotel & resort clients with legal services when you need them
Greenberg Traurig’s Hotels, Resorts & Clubs Practice advises our clients – including property developers, owners and operators, as well as governments, private government corporations, governmental and private financial institutions, and financial consultants – on virtually all aspects of their involvement in the industry, providing practical legal services for their business needs.
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 19
Law & Accounting
A side from confirming that indemnification and waiver clauses
are contained in a lease, many landlords and tenants pay little attention to the language of the clauses themselves and their down-the-road implications. With an indemnification, the indemnifying party (i.e., the indemnitor) assumes respon-sibility for the claims of injury or property damage asserted by third parties against the party being indemnified (i.e., the indemnitee). The indem-nitor insures the indemnitee and substitutes its liability for the indemnitee irrespective of fault, unless liability aris-ing from the indemnitee’s own fault is carved out from the clause or not permitted under applicable law (e.g., in Colo-rado, a lease requiring a tenant to indemnify a landlord for the landlord’s gross negligence or willful misconduct in not enforceable; however, a lease can require a tenant to indem-nify a landlord for the land-lord’s own negligence).
With a waiver and release, the landlord and the tenant agree to bear the risk of loss of their property if the loss is caused by the other. The theory here is that because each party knows the value of its property at lease inception, each party should be expected to look to its own property insurance for recovery, regardless of fault. The landlord and tenant are in the same positions as they were before the lease except that they have agreed to waive claims against each other and agreed to bear their own losses or insure them.
The careful review and draft-ing of indemnification and waiver clauses should not be overlooked by landlords and tenants and their respec-tive attorneys, as the conse-quences of not doing so can be significant. In one Colorado case, the Colorado Supreme Court determined that a ten-ant was contractually required to indemnify its landlord against damages suffered by a patron who slipped on ice in a shopping center’s parking lot, this despite the fact that the landlord was contractually obligated under the lease to
maintain the parking lot. Because the l a n d l o r d ’ s actions did not amount to gross neg-ligence or in tent iona l misconduct, which acts were specifi-cally exclud-ed from the tenant’s indemnifica-tion obliga-
tions, the court held that the indemnification clause did not violate public policy and suf-ficiently expressed the parties’ intent that the tenant would indemnify landlord for acci-dents and losses occurring in the parking lot, even those caused by landlord’s negli-gence.
In another case, the 5th Cir-cuit Court of Appeals inter-preted a lease provision where-by the tenant released the land-lord from any and all damages to both person and property and agreed to hold the land-lord harmless from all such damages during the term of the lease as not requiring the tenant to indemnify the land-lord for damages for personal injuries suffered on the prem-ises by a third party. Despite the landlord’s argument that the clause was intended to include the tenant’s indemni-fication of third-party claims, the court found otherwise, stat-ing that there was a significant difference between a waiver and release, such as the lease contained, and an agreement to indemnify the landlord and hold it harmless from claims of third parties.
Assuming the parties, and their respective attorneys and insurance providers, have reviewed and understand the obligations created in a lease’s indemnification and waiver clauses, the primary consid-eration becomes how risk is allocated. Most landlord lease forms, as initially drafted, will attempt to shift to the tenant, in the form of an indemnifi-cation obligation, all responsi-bility for losses and accidents on the landlord’s property, not
just occurring in the premises, and inclusive of those losses and accidents resulting from the negligent actions of land-lord and its agents, contrac-tors or employees. In addition the landlord lease form will require the tenant to waive all claims against the landlord, but there is no reciprocal waiver by the landlord in favor of the ten-ant. Depending on the tenant’s negotiating strength, a tenant should not agree to indemnify the landlord for its own neg-ligence, or the negligence of landlord’s agents, contractors or employees, or for losses and accidents occurring outside the premises unless the ten-ant’s insurance already insures against such occurrences. Moreover, depending on the tenant’s insurance coverages, the tenant should push back and insist that the indemnity be a cross-indemnity, not just one way from the tenant to the landlord. The waiver should only extend to property dam-age and not personal injury, and it is appropriate for the tenant to require a cross-waiv-er by the landlord, especially since the tenant generally pays for a portion of the landlord’s property insurance through operating expenses.
Pragmatically, while not always the case, the parties’ negotiation of the indemnifica-tion and waiver clauses should ultimately be guided by the parties’ reciprocal insurance obligations and the laws of jurisdiction in which the prem-ises are situated. By way of example, if the landlord already intends to insure occurrences in the tenant’s premises caused by landlord’s own negligence, it is likely unnecessary to get held up over whether the ten-ant should also indemnify the landlord for such occurrences. Similarly, if the tenant’s insur-ance already covers claims aris-ing from the negligence of its employees, there is likely no need for the tenant to request that the landlord also insure against the same in the com-mon areas. Finally, there is no point in spending time and money negotiating a clause that will ultimately be invali-dated by law.s
A brief overview of waiver clauses & indemnification in leases
Jonathan G. Nash
Attorney, Senn Visciano Canges PC,
Denver
Understandingwhat makes you unique.
www.swlaw.com
®
Because no two clientsare ever the same.TM
TABOR CENTER | 1200 SEVENTEENTH STREET | SUITE 1900 | DENVER, CO 80202 DENVER | LAS VEGAS | LOS ANGELES | LOS CABOS | ORANGE COUNTY | PHOENIX | RENO | SALT LAKE CITY | TUCSON
Page 20 — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
Construction, Design & Engineering News
GH Phipps Construction Cos. was selected by Colorado Col-lege to renovate and expand Tutt Library – part of the college’s commitment to 100 percent car-bon neutrality by 2020.
The modernization of the building is designed to not only adjust the library to the school’s
“Block Plan,” an academic schedule that allows students to plunge into a different subject every 3 ½ weeks rather than balancing several throughout a semester, but also add sustain-able features to the building.
The estimated $30 million project will include adding
39,000 square feet to the library and demolition of the 1980 Tutt South addition. A 9,700-sf fourth level also will be added to the original library, which was con-structed in 1962 and designed by Skidmore, Owings & Merrill of Chicago. The 63,000-sf reno-vated library will house a new
Center for Immersive Learning and Engaged Teaching.
The project will involve the temporary relocation of the current library, abatement and inclusion of a geothermal sys-tem within the new landscaping.
Pfeiffer Partners Architects of Los Angeles is the architect
on the project and is working with consultants MASS Design Group of Boston.
Work is expected to start in May with completion in August 2017.
Colorado College is located at 14 E. Cache La Poudre St. in Colorado Springs. s
GH Phipps to renovate, expand Tutt Library at CC
Pfeiffer PartnersThe estimated $30 million project will add 39,000 square feet to the library on Colorado College’s campus.
Taylor Kohrs recently com-pleted renovations at Colo-rado Athletic Club Flatirons.
The firm renovated the facility over an eight-month period, which required sig-nificant phasing to ensure the guest experience was not disrupted.
A new mezzanine was built to house a group fitness room, yoga studio, private yoga and Pilates rooms, chi-ropractic services and mas-sage services to the facility at 505 Thunderbird Drive in Boulder. Access to the sec-ond floor required the addi-tion of a hydraulic elevator and staircase.
Additionally, locker rooms were expanded to include
a steam room, hot tub and sauna while a new café and seating area were added to give guests a place to hang out and eat.
Renovations also included striping and resurfacing the basketball court, racquetball and squash court.
The property is locat-ed in a flood zone, which required addressing drain-age improvements, as well as a flood protection system was installed on the exterior walls and a floodgate at the club entrance.
Taylor Kohrs collabo-rated on the project with owner The Wellbridge Co. and architecture firm Nama Partners.s
Taylor Kohrs renovates Colorado Athletic Club Flatirons in Boulder
Work at the Colorado Athletic Club Flatirons included addressing drainage improvements, construction of a new mezzanine and expanded locker rooms.
Adolfson & Peterson starts Block 32 in Old Town Fort Collins
MW Golden Constructors finishes fire training simulator
Adolfson & Peterson Construc-tion has broken ground on Block 32.
The project in Old Town Fort Collins represents the beginning of the city of Fort Collins’ plan to redevelop its municipal services complex and create a more wel-coming civic center.
The firm’s work on the ini-tial phase includes the erection of a three-story, 37,500-square-foot city of Fort Collins Utilities Administration Building.
The new municipal office building was designed by RNL Design to be one of the most
MW Golden Constructors recently completed the city and county of Denver’s new fire training simulator.
The six-story steel tower was constructed alongside an exist-ing five-story training tower. The two towers are connected at the third and fifth levels with slip connections, which allow the two buildings to move inde-pendently, accommodating for such forces as wind.
The new enclosed tower includes training features such as a burn room, a residential training room and an industrial training room. The residential and industrial training rooms
Groundbreaking on Block 32 represents the start of the city of Fort Collin’s plan to redevelop its municipal services complex and create a more welcoming civic center.
The new enclosed tower includes training features such as a burn room, a residential training room and an industrial training room.
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 21
Construction, Design & Engineering News
Studio3877 completes renovation of Territory Kitchen + BarWashington, D.C.-based architecture and design firm Studio3877 completed a full renovation of the Territory Kitchen + Bar at the Hilton Garden Inn Denver Downtown. The studio, in its first Colorado project, was tapped to give the 3,850-square-foot restaurant and bar a personality that celebrates time spent on the slopes and in the lodge. The restaurant features a leather sofa, faux animal heads and toboggans positioned on the ceiling used to provide texture when guest look up. As well, custom-painted Adirondack chairs are available for diners to relax in while waiting for a table. Other features include glass jars and shelving that mimic a pantry and divide the main dining room; a custom rope wall installation set at the back of the dining room; picnic tables; and the ultimate “ski” bar, where ski faces add color to bar front. The hotel is located at 1400 Welton St.
Mortenson releases cost index report for Denver market
Mortenson Construction recently released its Morten-son Construction Cost Index in which the Denver market con-tinues to show growth driven by increases in many of the material components of the index and double-digit growth in the local labor market.
Denver’s overall construction cost index increased 1 percent in the second quarter and is now about 4 percent above where it was a year ago, according to the report. After years of trailing national trends, Denver’s index is now holding nearly even with the national average.
The index noted that Den-ver’s construction employment has increased by double-digit percentage points for nine con-secutive quarters – a trend that should continue through 2015.
Additionally, the Denver index reported on building component trends, comparing the second quarter of 2015 to first-quarter 2015. It noted that the highest growth was in cast-in-place concrete, traction eleva-tors and unit masonry. Slight growth was in finish carpen-try, acoustical ceilings, deck formwork, electrical systems, entrances/storefronts and fire systems. Flat component trends were in HVAC systems, paint/wall covering, reinforced steel, site utilities, gypsum board, earthwork and plumbing sys-tems. Declining trends were in structural steel, roofing, steel framing and flooring/carpeting.
Mortenson noted that there could be some underlying price weakness, as many components show flat or declining prices – including the largest compo-nent, HVAC – 13 percent of the index – remained flat this quar-ter.
The index advises building owners to note that market con-struction employment trends are plateauing, but the local cost index continues to expand as the local construction mar-ket strengthens. It recommends owners plan on a 4 percent increase for 2015 and 2016.
The index is calculated quar-terly by pricing a representa-tive nonresidential construction project in Denver and other geographies throughout the country.s
Construction starts on Google’s 300,000-square-foot Boulder campus Construction has started on the
latest milestone to Colorado’s tech sector – Google’s Boulder cam-pus.
A groundbreaking ceremony recently was held for Google’s Boulder campus, a 4.3-acre site near the southwest corner of 30th and Pearl streets, where three, roughly 100,000-square-foot buildings will be constructed.
Construction began on Phase 1 of the campus, which includes the first two buildings, and is expect-ed to open in early 2017. While under construction, the site will feature artwork produced for this occasion by Boulder artist Phil Lewis.
Forum Real Estate Group is the site developer and, upon comple-tion, will lease the buildings to Google. Tryba Architects designed Google’s Boulder campus.
“We are very excited to be breaking ground on our new office development project with Google, which will help boost the growing technology industry in Boulder by bringing more tech job opportunities to the area,” said Darren Fisk, founder and CEO of Forum Real Estate Group.
“This office campus was care-fully designed to fit naturally into the fabric of the Boulder commu-nity – located adjacent to the Boul-
der Transit Village with connec-tivity to the multi-use path and trail system; plenty of public open and green spaces; and thoughtful architecture and materials to com-plement neighboring buildings.”
“We’re incredibly honored for the opportunity to design Google’s new Boulder campus,” added Collin Kemberlin, prin-cipal with Denver-based Tryba Architects. “Both Google and the community requested that the building meet stringent standards with regards to sustainability and
energy usage. The innovative building shape, open floorplans affording all employees access to daylight and views, and the high-performance building enve-lope each contribute to a working environment that echoes Google’s beliefs: creativity, innovation and corporate responsibility.”
The design of the campus includes its achieving at mini-mum a LEED Gold rating with a minimum 31 percent energy savings over the ASHRAE stan-dard. Solar panels on the roof will
contribute 140 kilowatts toward powering the campus while high ceilings, exposed structure and large windows will maximize access to daylight and views.
This campus will build on Google’s current 300-plus-person presence in Boulder and Thorn-ton and allow the tech company to grow organically and hire for more positions as they become necessary. Phase 1 of the campus will have space for 1,000 people and Phase 2 will add space for 500 additional employees.s
Tryba Architects designed Google’s Boulder campus
Lerch Bates recently announced the installation of 16 elevators and 11 escalators for Denver International Airport’s Hotel and Transit Center Program is near-ing completion.
Lerch Bates, an international consulting firm for vertical trans-portation, façade access and logistics, announced in February 2013 that it had been selected to design the elevator, escala-tor and façade access systems of the $544 million expansion at DIA, including the Westin Den-ver International Airport portion of the project slated to open in November. A focal point of Lerch Bates’ vertical transportation design for the expansion project is three five-story escalators that connect the transit center on level one with the public plaza on level five. Paris-based light artist Yann Kersalé was selected to provide a lighting design for the train and level five canopies and a unique
video-based art installation directly above the 60-foot esca-lators. Passengers will witness slow moving images projected onto a faceted rock-like structure fabricated from aluminum. The structure will be 23 feet wide, 36 feet tall and will cover 1,100 square feet. Kersalé titled the work “L’eau dans tous ses êtats” or “Water in all of its states.”
“DIA’s Hotel and Transit Cen-ter Program is an extraordinary expansion project that will help ensure DIA remains a competi-tive leading global airport,” said Lerch Bates Area Vice President-West Jeff Marsh. “Lerch Bates has designed the vertical trans-portation and façade access sys-tems for hundreds of landmark structures in dozens of countries and we are honored to be part of such a magnificent and expan-sive project.”
The Hotel and Transit Center Program consists of three physi-
cally integrated projects includ-ing the construction of a 519-room Westin hotel, Regional Transportation District commut-er rail and bus transit center that is expected to serve more than 1,800 rail passengers daily and a vast public plaza that will feature entertainment, art exhibits, res-taurants and more. The 22.8-mile Regional Transportation District East Rail Line, currently under construction, will connect the new commuter rail station with downtown Denver. Construction of DIA’s expansion project began in the fall of 2011 with the Westin hotel and public plaza slated for completion later this year and commuter rail service beginning in 2016.
Gensler served as the designer for the Westin hotel and confer-ence center, architect of the Public Transit Center and public plaza and master planner for the entire Hotel and Transit Center Pro-
gram. Anderson Mason Dale is the architect of record for the Public Transit Center.
The Hotel and Transit Center
Program will complete the origi-nal vision for the airport and is the first investment in DIA’s Airport City initiative.s
Lerch Bates nearing completion of elevator, escalator systems at Denver International Airport
A focal point of Lerch Bates’ vertical transportation design for the expan-sion project is three five-story escalators that connect the transit center on level one to the public plaza on level five.
For contact information, firm profiles & links, please visit www.crej.com and click on “Industry Directory”
PROJECT OF THE WEEK • ARCHITECTURE
ej architecture designsVillage at Westerly Creek II
e j architecture designed this 65-unit, affordable, senior housing project for the Housing Authority of the City of Aurora. ej architecture was also commissioned for Phase I consisting of 55 units, which was completed in August 2012.
Each unit is equipped with a patio or deck and tall ground-floor patio walls provide a sense of security and offer privacy. The courtyard gardens create community and the secured entry and camera system provide resident safety. A homelike living space wel-comes visitors to the complex. Other amenities include tuck-under parking, community gardens, a fitness room and rooftop patio.
PROJECT OF THE WEEK • OFFICE FURNITURE
PROJECT OF THE WEEK • CONSTRUCTION
White Construction Group completesHeidi’s Brooklyn Deli at DIA
Elements, Elsy Studios createinnovative space for hybris software
W hite Construction Group recently completed its first concession project at Denver International Airport. The 1,240-sf Heidi’s Brooklyn Deli project, located in Concourse B, consisted of a total rebuild and features new
mechanical and electrical upgrades, new ceramic tile, millwork and casework. The kitchen features granite countertops and high-end, stainless steel, energy efficient, appliances. Working double shifts, White Construction Group superintendents Dan Adriaens and Josh Reitz, as well as project manager Kathryn Armstrong, teamed with Concessions International and Silhouette Design Architecture to deliver reno-vations ahead of schedule to one of the several Heidi's locations around the nation. White Construction Group is engaged in a three year on-call contract with DIA and is working on the repairs of 18 existing grease traps, structural upgrades at eight electrical rooms and completed the Concourse C carpet replacement in late 2014.
T he goal of hybris’ remodel was to strengthen the company’s innovative cul-ture and allow the company to adapt to accommodate growth. To that end, Elsy Studios partered with ELEMENTS to focus on solutions that would allow
hybris’ employees to flesh out ideas wherever they happened. Writable surfaces and lounge-like seating were selected to facilitate impromptu meetings and col-laboration, and private spaces were incorporated to support concentration and in-dependent work. The result is a space as innovative as hybris itself.
PROJECT OF THE WEEK • ARCHITECTURE
DLR Group designs renovationsfor Pueblo West High School
T he newly renovated Pueblo West High School in Pueblo is a state-of-the-art, 21st century educational facility that meets the needs of the growing enrollment in the Pueblo West Community. A new 750-seat auditorium is the
showpiece of the project, and incudes band, choir and drama rooms. The new ad-ministration addition gathers all administrative staff into one location and includes a safe-entry vestibule to monitor access. The added two-story wing includes a new science lab, TV Studio, and several general classrooms to accommodate grow-ing student enrollment. The addition of the auditorium and new safe entry, with stronger identification of the front of the school, helps create a new identity for the school and clearly distinguishes it as the hub of the local community. HW Houston Construction was the construction manager/general contractor.
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 23
Page 28 — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
Construction, Design & Engineering
Y ou’ve just come across a great new product that is marketed as
an acoustical product. It says “great acoustical properties” right on the marketing material sheet you found online. Terrif-ic, this product has “acoustical properties,” but so does a rock or a sofa, and so do you for that matter. Everything has some type of acoustical properties ... Everything.
Probably the most com-monly encountered acousti-cal properties include absorp-tion vs. reflection and isola-tion vs. transparency. All of these properties will exist in any material or object in dif-ferent amounts. The question that needs to be asked is not, “Does this product have acous-tical properties?” but instead, “What are the product’s specif-ic acoustical properties and are those properties what I need?” Furthermore, “Are they in the amounts that I need and in the acoustical ‘places’ (frequency bands) I need them?”
In general, any single mate-rial is good for one of these properties more than the other due to the nature of the way these materials perform their acoustical functions. Heavy, dense materials with lots of mass are needed to stop noise from transmitting through to the other side of a wall. Lighter, permeable materials are need-ed to absorb sound. Hard, non-porous surfaces are needed to reflect sound but don’t need to have a lot of mass, just surface density.
Products made of an indi-vidual material that claim to have good performance at con-flicting acoustical properties
typically are mediocre or their perfor-mance var-ies greatly d e p e n d i n g on which fre-quency band you are talk-ing about. If a product claims to have mul-tiple proper-ties such as being good at absorption
while also blocking noise, look for it to be made from multiple materials that have features suited to each of the acousti-cal properties it is promoted as having. A good example is fiberglass acoustical tiles with gypsum board adhered to the back.
Luckily, the acoustical indus-try has a way of objectively qualifying and quantifying exactly how much sound is reflected vs. absorbed or blocked vs. transmitted and can break down these values at each frequency band. This is the information and data that is needed to answer those ques-tions we asked earlier. Is this the correct acoustical property I need? Is it the right amount of that property and in the right places? When reviewing the acoustical properties provided by manufacturers, it is impor-tant to qualify the data as accu-rate and reliable by verifying that the data comes from labo-ratory tests performed to the correct and industry accepted test standards.
The two most common acoustical properties that are
needed when designing a space are acoustical absorption and acoustical sound isolation, or transmission loss, as described below.
n Absorption. If the prod-uct says it absorbs sound, the Noise Reduction Coefficient and the Sound Absorption Average ratings should be pro-vided and the octave band or one-third octave band absorp-tion coefficients should be made available upon request by the manufacturer. Absorp-tion is the ability to reduce acoustical energy when a sound wave interacts with a material. The specific absorp-tion properties of a material are presented in octave or one-third octave bands as a decimal coefficient between 0.0 and 1.0, but it is common to see num-bers that go slightly above 1.0 in the higher frequency bands. In its simplest form, a rating of 0.0 will mean that none of the acoustical energy in that band is absorbed and all of it is reflected off or transmit-ted through. A rating of 1.0 or higher means that nearly all of the energy at that band is absorbed. The Noise Reduc-tion Coefficient and the Sound Absorption Average are two common ratings for absorption that condense the performance of the product into a single number. The correct testing standards for this type of data are the ASTM E423 Standard Test Method for Sound Absorp-tion and Sound Absorption Coefficients by the Reverbera-tion Room Method or ASTM C384 Standard Test Method for Impedance and Absorption of Acoustical Materials by Imped-ance Tube Method. If the data
can’t be verified as coming from one of these standards or an international equivalent, then the reliability of the data comes into question.
n Transmission Loss. Trans-mission loss is the ability of a material to stop or isolate sound from going through a wall or floor/ceiling. The octave band or one-third octave band transmission losses (in decibels) should be provided for any material or assembly claiming to be good at acousti-cally isolating two spaces from each other. Transmission loss data is then used to determine the Sound Transmission Class rating of an assembly. In gen-eral, the higher the STC value, the greater the isolation. Some-thing to keep in mind is that
STC values do not add linearly. So a product that has an STC 20 included in an STC 40 assembly will not bring the new assem-bly up to an STC 60. Also, some products that claim to improve the STC of a partition, such as resilient clips, damping compounds, glues and sealants cannot be tested for an STC rating by themselves and have to be included in an assembly to be tested. The manufacturer should provide transmission loss and STC data based on the specific assembly construction that is in question. The rec-ognized test standard for this data is the ASTM E90 Stan-dard Test Method for Labora-tory Measurement of Airborne Sound Transmission Loss of Building Partitions and Ele-ments. Additionally, the Sound Transmission Class is the single number rating for transmission loss properties of a partition or barrier. It is determined by the ASTM E413 Classification for Rating Sound Insulation. Just as with absorption, if the source of the data can’t be veri-fied to have been collected in accordance with these stan-dards, the accuracy and the reliability of any application of it should be questioned.
The key takeaway here is that whether you are looking for absorption, transmission loss or diffusion, acoustical properties have standardized and objec-tive ways of being measured and reported. Armed with the knowledge of how to qualify and quantify how these prod-ucts perform, you can make sure that you are getting the correct type and amount of acoustical performance needed for project specific situations. s
O ver the last 30 years, there have been many changes within the
development and construc-tion industry. Standard prac-tice within the geotechnical, civil and structural engineering community evolved, new tech-nologies developed and growth led to development in many diverse areas, but several key factors impacting development remain constant. Following are several factors that we see influ-ence project economics and per-formance. Addressing some of these items on future projects can help mitigate risk, maxi-mize available project budgets and unify the project players into a more cohesive team.
n Establish performance criteria. It is imperative that project ownership understands the expectations for the physi-cal performance of the project. All aspects of development contain inherent risk and are subject to movement and sub-sequent damage affiliated with the geologic conditions present, changes that the development is imparting to the geologic conditions, and deterioration due to time and use. Therefore, it is extremely important that ownership explicitly convey its expectations regarding short- and long-term performance of all aspects of the development to all pertinent members of the
project design and construction team.
n Make site use efficient. Large sites usually are not uni-form with respect to geological characteristics. Avoiding some areas and concentrating around others will reduce costs. When-ever possible, it is important to make use of present or near-by materials and incorporate design and construction meth-ods that are harmonious with the existing site.
For example, a project we were involved with was a large mixed-use development con-sisting of numerous buildings (residential, office, retail and medical) of various sizes. The buildings ranged from conven-tional, single- and double-story inline retail, to large mall-type structures along with outlying buildings consisting of offices, restaurants, medical offices and residential buildings, all of which had differing perfor-mance requirements. A large medical facility housing sophis-ticated equipment located on one portion of the site was more sensitive to movement than the retail and office buildings, which, in turn, were less toler-ant to movement than the floor slab of a nearby parking struc-ture, and that was less tolerant to movement than an outlying asphalt parking lot. Because of movement tolerance, all of these
structures re-quired differ-ent founda-tion systems. In several cases, how-ever, build-ings were repositioned within the site to take a d v a n t a g e of geological features that were benefi-cial in achiev-ing desired
performance. In other instances, structures or improvements were relocated to avoid geo-logic or site features that would have increased costs in order to meet the established criteria.
n Combine information into a geotechnical report. Geo-technical engineers usually are retained early in a project, often before final site layout, grading or landscaping is determined. While it is not always possi-ble to have finalized, detailed development information at the time of retention, a geotechni-cal consultant can incorporate this information, when it is provided, prior to completing the final geotechnical report (or requesting the report to be revised when such information becomes available). The result is a report that is less generic
and more specific to the actual planned development. A report prepared in this manner typi-cally will have more thorough information and will be use-ful to the design team as well as prospective contractors and subcontractors.
n Conduct a comprehensive site evaluation. On large proj-ect sites or sites with diverse topography, adding additional holes, excavating test pits and meeting with potential contrac-tors on site is a cost-effective way to reduce the possibility of encountering unanticipated conditions. Most local geo-technical consultants are using 4-inch-diameter augers during site drilling. The percentage of soil on a site observed using this procedure is less than a small fraction of a percent. The cost of adding additional borings, excavating test pits or walking the site with potential contrac-tors and subcontractors is low compared to the benefits that can be derived during bidding and construction. Contractors can assist in identifying the things that impact their costs and constructability, and they can work with a geotechnical consultant to make efficient use of site materials, reduce change orders and help keep projects on schedule.
n Effective grading pro-vides value. In my opinion,
and one that may not neces-sarily be shared by other engi-neers, an excellent grading plan – one that results in effective, rapid surface drainage that conveys water well away from site improvements in all direc-tions – almost always is a better use of money than expensive, comprehensive soil remediation or sophisticated foundations. While not an absolute, care-fully controlling surface water normally will reduce the occur-rence of problems that nega-tively impact the performance of site improvements.
n Review the final project design. Prior to construction, but after the final design is completed, including pertinent landscape plans, it is benefi-cial to sit down with the entire project team and review the project documents and owner-ship expectations with regard to the performance and bud-get of the development. Mak-ing necessary revisions, alter-ing drawings or redesigning at this point can be frustrating, but it is a lot more cost-effec-tive than doing so during con-struction or, worse, correcting or remediating something after the project is complete. As with many things in life, effective communication up front will pay dividends throughout the design, construction and life of a development.s
Finding the right acoustical performance product
Engineering considerations in project development
John GarretsonAcoustical consultant,
D.L. Adams Associates, Kailua,
Hawaii
Andrew Suedkamp
President, Ground Engineering, Englewood
Whether you are looking
for absorption, transmission
loss or diffusion, acoustical
properties have standardized and objective ways of being measured and
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 29
Kerry Swain and Steve Spar-row were promoted to general superintendent and Ryan Shaw was named senior project man-ager at Swinerton Builders.
Swain and Sparrow will guide field supervision on multiple projects, providing direction and mentorship to each project’s site-specific supervision personnel. Shaw will continue to manage complex interior construction-focused projects.
Swain joined the general contracting firm in 1993 as an
assistant superinten-dent and has progressed in his career through the positions of superinten-dent and senior super-intendent. His background
with Swinerton is varied, includ-ing building projects in the multifamily, office, military and public market sectors. He has built more than 4 million square feet throughout his career.
Sparrow joined the firm in 1997 and has delivered a full range of projects, including several in the hospitality, office, military and multi-family market sectors. Over his career, he
has built more than $715 million worth of proj-ects.
Shaw joined the firm as a project engi-neer after graduating from Colo-rado State University with a Bach-elor of Science
in construction management.
At the company, he has focused exclusively on managing ten-ant improvement and special projects for clients including Google, Avaya, Jacobs Engi-neering, McGraw-Hill and Spectranetics.s
Thornton Tomasetti made multiple promotions in its Den-ver office.
Jeffrey D’Andrea was named senior associate; Benjamin Kaan was named associate; Carole Rusch was named senior project engineer; Joseph Camilleri and Jacob Hoffman were named project engineers; and Timothy Gilchrist and Devin Mitchell were named senior engineers at the structural engineering con-sulting firm.s
Davis Partnership Architects recently added a number of new employees.
Alice Santman joined the architecture firm as building information modeling manager.
She brings 25 years of com-puter-aided design, BIM and informa-tion technolo-gy experience and during her career has been a project architect, proj-ect manager,
BIM manager and BIM educator. Santman will coordinate all of the firm’s BIM/Revit processes, conventions and standards.
Jeff Womack is an architect who will be developing design and documenta-tion for com-mercial and health care projects at the firm. Womack is an Iowa State Univer-sity graduate
who has more than a decade of experience in the delivery of
projects and is skilled in technical development and BIM modeling.
Justine Elliott joined the firm as an interior design intern and will be working with the inte-
rior design studio. She is an Oklahoma State Univer-sity gradu-ate and has experience designing health care interiors in Connecticut. Previously,
she worked as a design specialist for Williams-Sonoma in Okla-homa City.
Heather Cooper, Ben Stokke, Justin Elliott, Karl Roesch, Gar-ret Sletten and Kevin Marti-nez joined the firm as architect interns. They will assist in the development of design and construction documents for commercial office, multifamily, health care and higher education projects.
Cooper joined as an architect intern in the commercial studio. She has an interior design degree
from The Art Institute of Portland in Oregon and a Master of Architecture from Arizona State Univer-sity. Cooper brings several years of expe-rience work-
ing for interior design and archi-tecture firms in Portland; Scotts-
dale, Arizona; Phoenix; and Las Vegas.
Stokke graduated from the Uni-versity of Nebraska-Lincoln with his Master of Architecture degree. While
in school, he studied abroad in
Germany, China and Brazil, and also has experience working in Innsbruck, Austria.
Elliott has four years of work experience in New Haven, Connecticut, and in Okla-homa City. He is an Okla-homa State University graduate and will be work-ing in the health care
practice group. Roesch graduated from the
University of Colorado Denver with his Master of Architecture and has an undergradu-ate degree from the University of Florida A&M. He brings
three years of work experience on custom single-family resi-dential and small commercial projects in Denver and Southern
California. Roesch will be work-ing with the firm’s com-mercial prac-tice group.
Sletten graduated from the Uni-versity of Kansas Mas-
ter of Architecture program and has an undergraduate degree from the University of Minne-sota. He will help develop the design and documentation for the firm’s health care practice group.
Martinez will work with the firm’s commercial and health care practice groups. He has a master’s degree from Arizona State University and is a Uni-versity of Colorado Boulder Environmental Design graduate.
He brings several years of experience working with architectural firms in Ari-zona and Colorado.s
Craig Southorn joined the
Denver office of Mortenson as vice president, preconstruction.
Southorn came to the Denver office of the construction and real estate develop-ment com-pany from Mortenson’s Minneapolis headquar-ters, previ-ously having overseen the
company’s mission-critical and federal business groups. He has more than 33 years’ commercial building experience, nearly all with the firm. Southorn will pro-vide executive leadership sup-port and strategy to the Denver operating group’s estimating and preconstruction services.
Brian Holland also joined the firm’s Denver operating group as busi-ness develop-ment execu-tive. Holland brings more than 20 years of construc-tion manage-ment and project devel-
opment experience to the firm, having specialized in commer-cial office, aviation and urban redevelopment projects. Holland will bring additional support focus to project development efforts.s
Nicole Fatchaline was named
CDE Who’s News
Kerry Swain
Steve Sparrow
Ryan Shaw
Alice Santman
Jeff Womack
Justine Elliott
Heather Cooper
Ben Stokke
Craig Southorn
Brian Holland
Justin Elliott
Karl Roesch
Garret Sletten
Kevin Martinez
Iwas recently at dinner with a group of fellow architects and, over the
course of the evening, the con-versation naturally turned to the state of the profession and musings about what the future holds for architects. What new opportunities are natural fits for the skills and knowledge architects bring to a project that may not have been fully realized or appreciated? What is the real and tangible value the architect brings to a project in all phases of design and con-struction, from the very early stages of conceptualization to the final stages of construction and owner occupancy?
All these questions beg the larger question: What is an architect and what should an architect do?
Merriam-Webster defines architect as “a person who designs buildings and advises in their construction.” In the
16th century, the architect was the master builder, proficient in all aspects of design and construction, the leader of skilled tradesmen, knowledge-able of all the building materi-als and construction methods necessary to build some of the most impressive structures, some of which still stand today. Now, in the 21st century, through the evolving nature of practice and construction, and also partially by advisement of well-meaning insurers and attorneys, liability has stripped away much of the value the master builder brought to a project. This has led to compartmentalization of the architecture, engineering and construction industries, and a decreased appreciation and understanding of the value an architect brings to a project.
Far too often we see exam-ples of the erosion of the role of the architect in the public
perception as well as a misunder-standing or underutiliza-tion of the full breadth of services architects can provide an owner in every phase of a project – from master planning, predesign
and conceptualization, all the way through construction administration and final occu-pancy.
In certain areas, the public may consider the architect the “handmaid” of develop-ers, devoid of personal concern for the community they are designing in, simply acting as the hand and stamp to accom-plish whatever their client
wants. Contrary to that belief, architects bring perspective, insight and leadership to the project team. They balance the needs of the project and the owner with the needs of the community and the build-ing occupants and become advocates for all stakeholders, working to arrive at the best solution that meets all the needs presented to the project.
Yes, there are certainly exceptions to this: No project or team is perfect, and not all needs can be met all of the time. That said, I believe that while architects may have lost some of the traditional, histori-cal roles of the master builder, they have been empowered to work with others in the archi-tecture, engineering and con-struction industry, closely coor-dinating their efforts among the design team and working hand-in-hand with their clients to deliver the same results
from 500 years ago: a beauti-ful, thoughtfully designed work of constructed art that itself becomes a member of the com-munity in which it resides.
In working together with owners, developers and other members of the design team, lifting our heads from the day-to-day production to be the invaluable, trusted advis-ers our clients need and want us to be, architects have the opportunity to regain some of the status and respect of the 16th century master builder that has been lost and stripped away over time.
By the time dessert arrived, my dinner companions had told me this was a “beautifully idealistic” view of the architect and perhaps it is a bit willfully naïve. But I truly believe in the end we are still master build-ers and provide more than the simple definition above would suggest.
Page 30 — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
American Subcontractors Association Colorado‘The Voice of Colorado Subcontractors’
3575 South Sherman Street, Suite 3, Englewood, CO 80113303.759.8260 • www.ASAColorado.com
W hat is an idiom? I don’t even like the sound of the word! Truth
is idioms are fun and by definition an idiom is a group of words that cannot be taken literally. And, because my tendency is to take everything literally, idioms are a great mental exercise for me. In 30 seconds how many idioms can you recite: rain cats and dogs, he bought the farm, jump the gun, sick as a dog, out of the blue, chip on your shoulder and in the swing of things.
In the swing of things expresses the action of returning to or becoming reaccustomed to something one hasn’t done for awhile
or to start to understand, enjoy or be active in something. For example, golf. If referring to golf when making the remark, “in the swing of things”, we
deviate from the idiom and the translation is literal!
Friday, July 17, 2015, the American Subcontractors Association Colorado hosted the 33rd Annual ASAC Golf Classic at Red Hawk Ridge Golf Course, Castle Rock, CO. So, you weren’t there,
unable to attend? Let me tell you what you missed! Literally, the weather was perfect, the course excellent and the people were fantastic. The ASAC Golf Classic was presented for the second consecutive year by busybusy and the PGA Tour bus compliments of ASAC member Aflac, Jeff & Krista Price was on site for the duration. Oh, the ASAC Community Partnership Council raised money for the Golf Classic Charity, Crisis Center . . . what a day it was and that is no idiom. See you next year, July 16, 2016 MARK YOUR CALENDAR!
PREMIER EVENT SPONSORS
Wagner Rents Annual Awards Gala
busybusy Annual Golf Classic
Preferred Safety Products Annual Health & Safety Summit
ASAC LEADERSHIP
ASAC President Rusty PlowmanDelta Drywall, Inc.
Vice President Carl Cox IIIExcel Environmental, Inc.
ASAC Past President Diane HillsDiamond Excavating, Inc.
ASAC Treasurer Richard ForsbergForsberg Engerman
SecretaryMark HohlenPlatinum Renovations
Director Jim DonaldsonA.I.A. Industries, Inc.
Director Mark HohlenPlatinum Renovations
Director Troy TinbergAllPhase Landscape, Inc.
Director Don ApplebyHolmes Murphy
ASAC Executive Director Debra L Scifo
ASAC Chapter Attorney Mark GruskinSenn Visciano Canges
ASAC Lobbyist Kristen ThomsonHeizer Paul, LLC
ASAC Chapter Development Peter ScifoOBS Consultants
tions that you should ask a welding company before hav-ing them weld on your project. Believe it or not this basic ques-tion is usually not considered the most important question to ask or may even be omit-ted from your prequalification package. While it is imperative to ensure that the welders you hire for your project are certi-fied, you must verify that they are certified for your specific scope of work.
Be aware! Most customers, even some contractors, do not know that certified welding is a blanket term with many subcategories. You might even be surprised to learn that there are plenty of welders in busi-ness that instill confidence in their customers by telling them, “Don’t worry, I’m certified!” without understanding that they are not actually certified for all procedures or for the specified procedure for your project.
With this in mind, it is best to stay ahead of the power curve by approaching welding com-panies with key points on your project to show that you are aware of the need for different certifications. Examples of key points include project charac-teristics such as; 1) the type of metal required, 2) whether the project is shop fabricated or field installed or both and 3) whether the project is structural or cus-tom fabrication. Perhaps the project includes a joist and deck package or pipeline welding. Each of these scenarios require a different type of certification, because each fall under separate welding procedures.
For exam-ple, you have a project at a ski resort that requires a roof access ladder made of car-bon steel and you also need a repair weld
on the 6” carbon water sup-ply line that supplies the snow making equipment. The shop welder for the ladder would require a minimum 2G and 3G certification identifying the ability to weld flat, horizontal and vertical positions. The field welder for the pipe repair on the sloped grade would require a 6G certification identifying the abil-ity to weld pipe in all positions. Note that a welder may be certi-fied in multiple procedures, but no single procedure certifies a welder for multiple scenarios.
Why have so many subcatego-ries of certification?
A welder who is certified on carbon steel may have per-fected all procedures for carbon steel, but may not have the same skills when welding on aluminum or stainless steel. Likewise, a welder who is certi-fied on stainless steel pipe may not have the same skills when welding on aluminum plate. All metals react differently and require different techniques, filler metals and overall knowl-edge of various metals and their thermal properties for sound welding. Properly certified weld-ers are subject matter experts in their area of qualification and are capable of providing peace of mind by delivering proven technical expertise.
Advanced welding companies are able to identify what you need for your project and direct you to the right company when
approached with a project that falls outside of their capabili-ties. Some projects may allow enough time for the welding company to certify a welder for a particular procedure; there-fore, be sure to ask if they are willing to do so, especially if your project requires a less com-mon procedure.
For more in depth informa-tion on welding certifications and procedures, visit the websites for the organizations who oversee the majority of welding codes in the United States. The organizations lead-ing certification in the US are, The American Welding Society (AWS), The American Society of Mechanical Engineers (ASME) and The American Petroleum Institute (API). The AWS is most commonly associated with structural welding certification and bridge welding certification. The ASME oversees hundreds of various technical codes, of which boilers and pressure ves-sels make up the largest section of standards. The API oversees codes for pipeline welding in the oil and gas industries.
The amount of oversight and number of certifications may seem daunting and confusing, but the key to properly abiding by certification requirements is finding a welding company that knows their business and knows it well. You need your project done right the first time by the right people to avoid complications, faulty welds and project delays. Rely on a knowl-edgeable welder to keep you headed in the right direction and take the heat off of your back. Know your project, but more importantly know who to call and what to ask when faced with hiring the right welding company.
Certified Welders: Are You Asking the Right Questions?
David VanderbeekVice President of
Business Development Mountain Man Welding
and Fabrication, Inc. dvanderbeek@mountainman welding.com
www.mountain manwelding.com
ASAC MEMBER PROFILE
Visit www.ASAColorado.com/Calendar for more information & registration
SEPTEMBER15 Construction Industry Networking / 7:00 a.m.16 Contract Study – Design Liability/8:00-9:00 a.m.17-18 STP – Unit 3 Planning & Scheduling/8am-5 pm24 Contractor Breakfast Interchange/7:30-9:30 a.m.
OCTOBER 14 Contract Study – Warranty Liability/8:00-9:00 a.m.15 CPR/First Aid Certification/1:00-5:00 p.m.20 Construction Industry Networking / 7:00 a.m.21 Contractor Breakfast Interchange/7:30-9:30 a.m.29 3rd Annual Health & Safety Summit/7:30 a.m.-3:30 p.m.
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 33
15THURSDAY 10/15 + FRIDAY 10/16 + SATURDAY 10/17KEYSTONE RESORT & CONFERENCE CENTER+ more than 550 architecture, engineering and construction industry professionals+ internationally-recognized keynotes and speakers+ president’s reception with prize drawings+ aia colorado and local section design awards gala+ aia western mountain region design awards gala
SAVEthe
DATE!
For more information and to become an exhibitor or sponsor, visit:AIACOCONFERENCE.ORG#pdc2015 // @aiaco_pdc
AIAWestern Mountain Region
15AIA Western Mountain Region 2015 Practice+Design ConferenceProudly Hosted by AIA Colorado
Page 34 — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
Field Supervisory Skills - Workshop SeriesPresented by Stephane McShane,
Associate Director at Maxim Consulting Group
You make your money in the field…Have you equipped your Field Leaders with the tools they need to be successful?
Flexible scheduling options to fit YOUR schedule! Pick the date and time YOU prefer!For a schedule and full course details visit our website: www.abcrmc.org
Contract Administration & Effective CommunicationsTuesday, September 29th
7:30 –11:30 am or 12:30-4:30 pm
Tuesday, December 1st7:30 –11:30 am or 12:30-4:30 pm
Understanding Productivity & Project LeadershipTuesday, October 13th
7:30 –11:30 am or 12:30-4:30 pm
Tuesday, December 15th7:30 –11:30 am or 12:30-4:30 pm
ABC Rocky Mountain Member: $225/session or $800 for series of 4 programs! Save $100!Non-Member: $300/session or $1100 for the series of 4 programs! Save $100!
Sessions will be held at the ABC Offices2267 West Yale Avenue • Englewood, CO 80110
Contact Kim Grosel for more details. Call 303.832.5812 or email [email protected].
Visit our website at www.abcrmc.org and look under the Education tab to download the forms.
Planning and Scheduling & Time ManagementTuesday, September 1st
7:30 –11:30 am or 12:30-4:30 pm
Tuesday, October 27th7:30 –11:30 am or 12:30-4:30 pm
Resource Control & Customer RelationshipsTuesday, September 15th
7:30 –11:30 am or 12:30-4:30 pm
Tuesday, November 17th7:30 –11:30 am or 12:30-4:30 pm
project as initially planned, any unused credits are placed back into the pool for others to use.
If a taxpayer is awarded state income tax credits and they cannot all be uti-lized in one tax year, the credits carry forward for up to 10 years. In addition to the 10-year carryforward, the credits also are fully transferrable, creating an additional avenue to help fund the rehabilitation project by selling them. By combining state tax credit with the federal tax credit for historic rehabili-
tation, it creates a two-fold incentive for property owners who can either absorb the credits directly or who seek to monetize the credits via a tax credit investor.
Not only is the increased state income tax credit projected to help incentiv-ize the rehabilitation and resurrection of many historic buildings and main streets across the state, but it also has the added benefit of providing some very valuable tax perks along the way.s
energy-efficient buildings in the state, according to Richard Shiffer, a principal with RNL.
Features of the office building include sustainable features such as solar panels, utilization of batters, direct current power and insulated enclosure and windows. The reliance on DC power, as opposed to traditional alternating current, will make the building unique in the state and coun-try, noted Adolfson & Peterson.
“We are proud to be part of such a col-laborative team to build this state-of-the-art facility that represents the first of its
kind in the nation,” said A&P Senior Vice President Tom Horsting.
The site, located at the northeast corner of Laporte Avenue and North Howes Street, also will include the restored land-mark Butterfly Building – part of the Pou-dre Valley Creamery facilities that used to occupy the site – which was moved 100 feet to the east to make room for the new construction.
Construction is expected to be complete in fall 2016.
“This is a proud day for Fort Collins,” said Doug Johnson, vice president for A&P. “The city has an exciting vision for this project. Now we have to execute.”s
allow the fire department to simulate conditions fire fighters experience in the field, giving them situational experience in a controlled environment. Smoke gen-erators and prop furniture and applianc-
es complete the simulated environment for the fire fighters.
The $1.6 million project broke ground in December.
The design-build team included WHP Training Towers, JVA Consulting Engi-neers, Keenan Consulting Group and JSH Associates.s
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 35
I f your property sustains sig-nificant damage, it is impor-tant to know whom to turn
to for assistance for the many aspects of a property insurance claim. If the claim is not accurately adjusted and resolved in a timely manner with your best interests in mind, your profits certainly will decrease. Regardless of the type of loss, whether fire, hail, natural disaster or other, a thorough inves-tigation and assessment is needed to capture all damages to the prop-erty.
Upon notifying your insurance company of a loss, the insurance company either will have an in-house adjuster or an independent, outside adjuster contact you and schedule an inspection to assess the damage. In-house and inde-pendent adjusters work on behalf of the insurance company. As in any profession, there are good, competent, ethical and trustwor-thy in-house and independent adjusters with different claim authority levels. And there are in-house and independent adjusters who may not be qualified to adjust your loss.
You do not have an opportu-nity to vet several adjusters to learn about their qualifications and background, and then choose which adjuster you would like to work with on your claim. Instead, you are provided with the name of the adjuster who you then meet at the property – hoping or believ-ing the adjuster is competent and ethical.
Many property owners opt to handle the adjustment of large and complicated property claims on their own or with existing person-nel – perhaps confident they are able to add this responsibility to the long list of other responsibili-ties they address each day – or per-haps the owners are unaware of a public adjuster’s services.
In Colorado, a public adjuster must be licensed by the Division of Insurance, and public adjusters serve as advocates for the policy-holder in the accurate, proper and timely adjustment of first-party property claims. Statutes regulat-ing the public-adjusting profession are in place (as an example, see CRS 10-2-103 or visit the Department of Regulatory Agencies website). A public adjuster assists by hav-ing others who are experienced in the claims process join your team to accurately capture damages to the property, equipment, business income and extra expense portions of your claim, and communicate directly with representatives from your insurance company.
As you begin to process all that needs to be addressed, among your first priorities is to protect the property from further damage. Your maintenance staff may assist with certain immediate, tempo-rary and emergency needs, but you will need others to assist in returning the property to its pre-loss condition. Also, you will need help assessing all sustained dam-ages, which should not be limited to damages that are readily appar-ent. In order to determine structur-al damages, a thorough investiga-tion is required to see if structural components are compromised in any manner.
For damage from a fire, you want to eliminate smoke, ash and soot that traveled up, through, under
and around all openings, behind walls, above ceilings and below floors. You do not want to remove soot from walls by simply wip-ing them. To eliminate the soot and smoke odor behind the walls, remov-
ing and replacing the walls is nec-essary. Your tenants will be none too pleased if, when returning, a smoke odor remains and inad-equate repairs were suggested as proper. Heating, ventilating and air conditioning, electrical and
plumbing systems need to be thoroughly inspected as well. If the loss is caused by water, you should remove the water quickly and properly dry impacted areas to avoid mold growth and subse-quent damage.
In addition to handling the building damage and repairs, you also must focus on those displaced. Whether your property is for com-mercial use, multifamily housing or another purpose, tenants are a source of considerable revenue. They will need a new, temporary location. How you assist them will play a large role in whether they return to the property. With proper business interruption and extra expenses coverage in place to assist in this type of loss – and with sup-
Property ManagementRecovering from a claim may adversely impact your profits
Page 36 — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
Property Management NewsCLS to manage Aurora’s Bella Vita
CLS, a local consulting and management services company specializing in retirement com-munities, announced a manage-ment partnership with Bella Vita, an apartment community located in Aurora, north of Cherry Creek State Park.
The eight-story community offers 86 one- and two-bedroom apartments ranging in size from 640 square feet to 1,120 sf. The renovated one-time Aurora City Hall is located near parks, restau-rants, shopping and transporta-tion hubs.
Jill Hiller, interim executive director, will oversee operations of the community, including sales and marketing, building and facil-ities maintenance, concierge ser-vices and housekeeping.
CLS also is the operating part-ner of Rosemark at Mayfair Park, a 72,000-sf, 88-unit assisted living and memory support senior care community that opens later this year in Denver’s Mayfair neigh-borhood.
group’s three properties to Sil-va-Markham Partners, a newly formed management company. The contracts effectively double the management firm’s current portfolio and extend its presence into Englewood and the Denver Tech Center.
The sites are LincolnPointe Lofts I, LincolnPointe Lofts II and Prentice Place Lofts. The build-ings offer one-, two- and three-bedroom apartment loft units and feature various amenities. The pet-friendly units also offer views of the Front Range and close prox-imity to local conveniences, such as shopping, golfing, dining and public transportation, including
Griffis/Blessing hired Erica Travelstead as management assistant to the Denver Mul-tifamily Property Services group. Travelstead will assist the regional and district man-agers with a 15-community, 3,200-unit portfolio from Boulder to Lone Tree and throughout metro Denver.
“Ms. Travelstead came to us highly recommended by
the regional m a n a g e r and we c o u l d n ’ t be more thrilled to have her supporting the Denver office,” said Pat Stan-forth, CPM,
senior vice president, Mul-tifamily Property Services. “Her property management knowledge, customer ser-vice skills and work ethic are exemplary; she will be a great asset to the Griffis/Blessing team.”
Prior to working for Griffis/Blessing, Travelstead was a property manager for the builder Creekside Homes.s
Property Management Who’s News
Erica Travelstead
porting information and required records – your profits should not be impacted by this loss.
The claims process is long and time consuming. Over the course of many months, at times years, depending on the time to complete required repairs after the claim is resolved, copies of records and numerous written or verbal com-munications are required on all
aspects of the claim. In-house and independent adjusters may assure you they and their consultants (including engineers, contents specialists and accountants) will handle your claim properly and there is no need to retain a public adjuster.
You may be told a coverage, extension or limit is different than what you determined to be accu-rate. You may be informed that the insurance company will pay
50 percent of what you believe is required and supported as part of your claim. If so, you under-standably would question the validity of the insurance com-pany’s position. Yet, many accept the information provided by insurance company representa-tives as true. However, doing so may impact your profits. Work cooperatively with insurance company representatives, but hold them accountable.s
BUILDING RESTORATION Walker Restoration Consultants 303-694-6622
CAFM/IWMS SOFTWARE CollectiveView303-268-3840
CCTV/DIGITAL VIDEO SURVEILLANCE SYSTEMSAmerican Automation Building Solutions Inc.720-529-0764Englewood Lock and Safe, Inc.303-789-2568Mathias Lock & Key303-292-9746
EXTERIOR LANDSCAPINGBrickman Group303-928-7881GroundMasters303-750-8867Landtech Landscape/Maintenance303-344-4465Martinson Snow Removal303-424-3708Mountain High Tree, Lawn &Landscape Company303-232-0666SiteSource Common Area Maintenance303-948-5117Terracare Associates720-384-5218
FACILITY MAINTENANCEAmerican Automation Building Solutions Inc.720-529-0764CAM – Common AreaMaintenance Services303-295-2424eBuilding Service303-592-1055Horizon Property Services, Inc.720-298-4323MC Building Services303-758-3336Precision Construction Solutions LLC303-565-1456SiteSource Common Area Maintenance303-948-5117
PRESSURE WASHINGCAM – Common AreaMaintenance Services303-295-2424SiteSource Common Area Maintenance303-948-5117 Top Gun Pressure Washing Inc.720-540-4880
PROPERTY IMPROVEMENT/ TENANT FINISHCAM – Common Area Maintenace Services303-295-2424eBuilding Service303-592-1055Facilities Contracting, Inc.303-798-7111Palace Construction303-777-7999
ROOFINGB&M Roofing of Colorado, Inc.303-443-5843Bauen Corporation303-297-3311CRW Inc. – Commercial Roofing & Weatherproofing720-348-0438D & D Roofing Inc.303-287-3043Douglass Colony303-288-2635Tecta America Colorado LLC 303-573-5953Turner Morris Roof Systems303-431-1300WeatherSure Systems303-781-5454Western Roofing303-279-4141
SECURITY SERVICESAmerican Automation Building Solutions Inc.720-529-0764Advantage Security, Inc.303-755-4407Universal Protection Service303-369-7388
SIGNAGEDenver Sign Group720-344-2330
Schlosser Signs, Inc.1-888-309-5571970-593-1334YESCO - Young ElectricSign Company303-375-9933
SNOW REMOVAL Brickman Group303-356-9578CAM – Common AreaMaintenance Services303-295-2424Facilities Contracting, Inc.303-798-7111GroundMasters303-750-8867Landtech Landscape/Maintenance303-344-4465Martinson Snow Removal303-424-3708PLM Asphalt & Concrete, Inc..303-287-0777SiteSource Common Area Maintenance303-948-5117Terracare Associates720-384-5218
TREE AND LAWN CAREDavey Tree Expert Company303-750-9273Mountain High Tree, Lawn& Landscape Company Denver: 303-232-0666Colorado Springs: 719-444-8800Swingle Lawn, Tree &Landscape CareDenver: 303-337-6200Fort Collins: 970-221-1287North Metro Denver: 303-422-1715
WEATHERPROOFINGBrown Brothers Contracting, Inc.303-598-1301Douglass Colony303-288-2635WeatherSure Systems Incorporated303-781-5454
WINDOW CLEANINGBob Popp Building Services Inc.303-751-3113
WINDOW TINTINGAll American Window Tinting, Inc.303-934-8468
BU
ILD
ING
OP
ER
AT
ING
SE
RV
ICE
S &
SU
PP
LIE
RS
For Contact Info, Firm Profiles & Links, Please Visit www.crej.com
Services & Suppliers DirectoryBuilding Operating
@
Join the DirectoryParticipating in this directory provides your firm year-round visibility in the newspaper and on our website. If you would like to include your firm in this directory, please contact Lori Golightly at [email protected] or 303.623.1148.
Page 38 — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
senior marketing coordinator in The Beck Group’s Denver office.
She is a certified professional services mar-keter with eight years of architecture, engineering and construc-tion experi-ence, previ-ously work-ing locally for Fentress Architects
and Kiewit Building Group before joining the commercial architecture, construction and development firm.s
RTA Architects added four new staff members to its team.
Joining the architecture firm are Matthew Carlson, Scott
Blosser, AIA, NCARB, Sheva Willoughby, Associate AIA, and Alexandria Asmus.
Carlson received his Master of Architecture degree from Wen-tworth Institute of Technology
and brings three years of professional experience to the company. He will be part of the health care and education teams.
Blosser, who joined
the health care team, graduated with a Bachelor of Architecture degree from Oklahoma State University. His previous experi-ence includes the Tandy Educa-tion Center at the University of Oklahoma, Chisholm Creek Master Plan and Tract 30 at
Chisholm Creek.
Willoughby received her Master of Architecture from the Uni-versity of Col-orado Denver and has three years of historic pres-ervation expe-rience and four years of experience in health care architecture. She also joined the firm’s health care team.
Asmus recently
graduated from the University of Northwestern. She joined RTA
as the new marketing assistant.s
Mainte-nance Design Group recently pro-moted several staff across the organiza-tion, includ-
ing Sheena Zimmerman in the firm’s Denver office.
Zimmerman was promoted to senior facil-ity designer. She has been with the firm, which specializes in planning and functional design for transporta-tion mainte-
nance facilities across the U.S., for six years and has worked on numerous transportation and municipal projects throughout the United States.s
Scott McHale, a senior project manager at Rowland + Broughton Architecture and Urban Design, was selected as a member of Aspen-based Roaring Fork Leadership’s Class of 2015.
Each year, Roaring Fork Lead-ership selects a group of individ-uals with diverse backgrounds to participate in a 10-month pro-gram designed to develop lead-ers within the local community, with class size limited to 40.s
CDE Who’sContinued from Page 29
Nicole FatchalineMatthew Carlson
Scott Blosser
Sheva Willoughby
Alexandria Asmus
Sheena Zimmerman
Scott McHale
Burton said the two companies share a common business per-spective and a long-term view with regard to tenants, the broker-age community and other stake-holders.
“HighField Business Park rep-resents a great location for indus-trial development with proximity to an educated labor pool, strong infrastructure and easy access to E-470, I-25 and the southeast light rail. We look forward to working with Bradbury Properties on this project and being part of their leg-acy to develop and grow this area into a top-tier market,” he said.
The park is located in Doug-las County, which Bradbury said has been an ally in development at HighField. “They’re very sup-portive. Things get done quickly and efficiently,” he said.s
BradburyContinued from Page 1
Tom Bradbury of Bradbury Properties, left, and Marshall Burton of Confluent Development have teamed up to build out the final 72 acres at HighField Business Park. Construction of a 100,000-sf speculative building catty-corner from Polystrand Inc.’s manufactur-ing facility, pictured in the back-ground, will start next month. HighField Business Park is located off E-471 and Peoria Street, near Centennial Airport.
Co. bought a 3.1-acre site on what was part of the Gates Rubber plant, Jona-than Fore, an executive at the Las Vegas-based com-pany, told the Colorado Real Estate Journal he couldn’t imagine a better site to develop a 260-unit apartment community for his company’s Denver debut.
“We like the location along Broadway,” Fore told CREJ.
“The site is uniquely located within walking distance, 1,500 feet, of two light-rail stations, Broad-way Station and Louisiana Station.”
Fore went on to say the community would cater to “young professionals seeking convenient access to the Denver central busi-ness district and the Den-ver Tech Center, Denver’s preeminent employment and entertainment cen-ters.”
Fore also liked that the site near East Mississippi Avenue and South Broad-way provides easy access to established neighbor-hoods.
“The location provides residents with light-rail access to the urban ame-nities of downtown Den-ver complemented by the natural amenities of the surrounding Washington Park and Platt Park neigh-borhoods,” Fore said at the time.
In 2012, he described the development, later called 1000 S. Broadway, as a $46 million project.
It turns out, Fore was right on all accounts.
His company recently sold the LEED Gold build-ing, which was completed in 2013, for $64.6 million.
Greystar was the buyer, adding to its portfolio of more than 1,600 units in a half-dozen apartment communities in the Denver area, according to Apart-ment Insights, a database by Cary Bruteig, principal of Apartment Appraisers & Consultants.
“There was a lot of inter-est in it from buyers,” said Pam Koster, who listed, marketed and sold 1000 S. Broadway with Moran & Co. partner Dave Martin.
The sale price equates to $239,793 per unit and $273.57 per square foot.
Koster said there might have even been more inter-
by Jill Jamieson-NicholsTrammell Crow Co. just started
construction at Crossroads Com-merce Park and already has a build-to-suit user for 61,870 square feet.
Empire Staple Co., a longtime Denver family owned company, will have a new showroom/warehouse/distribution building in the park, where 640,000 sf of speculative industrial construc-tion also is underway.
Empire Staple, which makes fastening systems and supplies used to manufacture, package and ship products, will acquire the building when it’s complet-ed in the first quarter, said Bill Mosher, senior managing director of Trammell Crow Co. in Denver. It initially will occupy about two-thirds of the building and lease out the remaining third.
Crossroads Commerce Park, located on 77 acres near the inter-section of Interstates 25 and 70, is a redevelopment of the formerly contaminated ASARCO Globe Plant. It offers a variety of indus-trial product type. First-phase
spec buildings include a 376,598-sf, 32-foot-clear warehouse/dis-tribution building; a 169,210-sf office/warehouse/showroom building with 24-foot clear height;
and a 96,973-sf warehouse with 28-foot ceilings.
“Every building is a different product type” in order to respond to the diversity of the market-
place and maximize the infill site, Mosher said recently.
“We have activity on every
Crossroads park gets started with 700,000 sf Fore sells apts. at old Gates site
by John RebchookWhen Kelly Leid was asked
how many meetings he has addressed to promote Mayor Michael B. Hancock’s vision to reshape northeast Denver, Leid answered: “Probably 1,000.”
And if you have attended any commercial real estate gathering in recent months, you know that if that is an exaggeration, it’s not by much.
“It’s easily been in the hun-dreds,” Leid said.
Leid, head of the North Denver Cornerstone Collab-orative created by Hancock in January 2013, is everywhere.
Leid’s role has become even more crucial recently, since Hancock announced that there will be a November bal-lot issue to fund an $865 mil-lion makeover of the National Western Stock Show complex.
The vote to extend the lodging and car rental taxes, mostly charged to visitors, will raise an estimated $476 million.
“Kelly is on the road con-stantly,” Hancock said. “Kelly is the key person meeting with key constituents and stakeholders on this issue. Kelly knows more about the National Western Center and the financing, and the stack-ing strategy for funding it than anyone. And he is doing a phenomenal job.”
Leid’s latest role in the Hancock administration high-
lights six projects that make up the NDCC:
• National Western Stock Show,
• Interstate 70 reconstruc-tion,
• RTD station develop-ment,
• Brighton Boulevard rede-velopment,
• River North, and• Elyria-Swansea and
Globeville neighborhood plans.
“Great cities begin with great city planning,” Hancock said when he appointed Leid from the director of Develop-ment Services for the city to the NDCC.
“Six primary projects with the potential to transform this corner of our city have in some cases included over a decade of planning,” Han-
cock said.“The time is now to estab-
lish deliberate connections that create place, drive job creation, generate substantial economic activity and attract investment,” Hancock con-tinued.
“I can think of no one better equipped to bring the part-ners together for our mutual benefit than our own,” he said.
Hancock said Leid has exceeded his expectation.
Leid is able to take complex ideas and boil them down to their essence, making them understandable to those well-versed to what is happening in Northeast Denver.
“What had been happen-ing in Northeast Denver was a train wreck and Kelly is playing a very crucial role in explaining to people the chal-lenges in Northeast Denver and the steps my administra-tion is taking to re-invent that entire Northeast corridor to a very grand scale,” Hancock said.
“We are very fortunate to have him,” Hancock said.
It’s not a hard sell for Leid.“I totally believe in the
mayor’s vision,” Leid said. “He is very genuine in what he wants to accomplish in the city and especially in North-east Denver. I see my job is helping to bridge the public and private sectors. I also will tell you the mayor if a very fun guy to work for.”
Hancock and Leid met when Hancock was on the Denver City Council, rep-resenting District 11, which covers Northeast Denver.
Leid at the time was head-ing the education founda-tion for Oakwood Homes, a position he held from 2002 to 2008.
“The issue back then was that part of Denver had become disconnected from the rest of the city,” Leid said.
Leid helped bring new schools to neighborhoods such as Montbello and Green Valley Ranch.
While the Denver Public Schools, not the City Council, is in charge of schools, the council often works closely with DPS.
“Making sure kids in his district, especially kids of color succeeded, was always very important to Michael,” Leid said.
Shortly after he left Oak-wood in 2008, Leid did a “short stint” at the Colorado Department of Education.
When Michael Bennet left as superintendent of DPS to join the U.S. Senate, Bennet’s successor, Tom Boasberg, reached out to Leid.
“I realized I really should be with DPS,” Leid said, given how closely he had worked with it when he was with Oakwood Homes.
As director of operations
Leid Hancock’s go-to guy for NE Denver
Kelly Leid
SECTION AA
AUGUST 19-SEPTEMBER 1, 2015
The first phase of Crossroads Commerce Park is underway.
Page 2AA — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
Office
by Jill Jamieson-NicholsUnited Properties is zero-
ing in on efficiency with a 212,000-square-foot specula-tive office building set to break
ground in the southeast subur-ban submarket next month.
The five-story Class A build-ing will offer 44,314-square-foot floor plates and 5:1,000
parking with lease rates from $19 to $21 per sf triple net, a notable discount to rates for other new Class A construction in the submarket.
The office building will kick off construction at Inova Dry Creek, a six-building business park at 7250 S. Havana St. in Centennial. The 650,000-sf park, catering to single- and multitenant occupancy, will feature at least three additional multistory office buildings and an industrial/flex building.
Short for “innovative,” the park will introduce enhanced, tilt-up office architecture to Denver, offering reasonable cost with low maintenance, durability, speed of construc-tion and minimal capital investment.
“We have been planning this project since the initial land closing in October 2014 and feel this is time to introduce Inova
Dry Creek to the mar-ket,” Kevin Kelley, vice p r e s i d e n t and regional manager of United Prop-erties, said in an announce-ment. “Our
project team’s successes at Enterprise Business Center in Stapleton demonstrate our ability to uncover market-changing opportunities,” he said, referring to the develop-er’s Class A industrial park on Denver’s Interstate 70 corridor.
Inova Dry Creek office bldg. zeroes in on value, efficiency
United Properties is kicking off development of Inova Dry Creek with a speculative office building that will offer lease rates starting under $20 per sf triple net.
Kevin Kelley
by Jill Jamieson-NicholsNorthstar Commercial Partners
has stepped up once again to buy a building with an unclear future.
With CoBank set to move to its new headquarters building in March, Northstar bought its existing 204,945-square-foot building at 5500 S. Quebec St. in Greenwood Village. It paid $16.15 million, or $78.80 per sf, and has set about finding a new user or users for CoBank’s nearly 180,000 sf.
“Our successful closing of 5500 S. Quebec brings us all a good deal of excitement here at North-star,” said company founder and CEO Brian Watson. “In the near future, we look forward to part-nering with local community and business leaders to bring over 800 jobs to this location, which will create opportunity for the employees, local businesses and
the community at large. In sum, we are in the business of creating opportunity for others through quality work environments,” Watson said in an announcement.
Northstar’s forte is buying
vacant and distressed properties and filling them up. It says it already is working with several prospective tenants and user-
by Jill Jamieson-NicholsA shared workspace provider
signed a lease for 72,000 square feet of office space in the Tri-angle Building in the Denver Union Station neighborhood.
WeWork, a workspace com-munity for entrepreneurs, freelancers, startups and small businesses, will have a ground-floor, private entrance into the building with glass visibility to the main building lobby on the first and second floors.
The lease fulfilled develop-er East West Partners’ goal of bringing a co-working tenant
to the Union Station neighbor-hood.
“Co-working and shared workspaces are a huge trend internationally, nationally and right here in Denver and is a concept we really wanted to bring to the Union Station neighborhood,” said East West managing partner Chris Framp-ton. “We couldn’t be more thrilled that WeWork has cho-sen the Triangle Building for its entrée in the Denver market.”
WeWork will move into the building, scheduled for comple-tion next month, in early 2016.
Cushman & Wakefield of Col-orado Inc. handled both sides of the transaction.
With an earlier, 70,000-sf lease by Liberty Global, the 210,000-sf Triangle Building, located at 1550 Wewatta St., is two-thirds leased. East West Partners is in discussions with several poten-tial tenants for the remaining space.
East West is developing the building with a controlled affiliate of joint-venture part-ner Starwood Capital Group. They are targeting LEED Gold certification.s
Northstar buys soon-to-be-vacated building for $16.15M
Shared workspace providertakes a third of Triangle Bldg.
Northstar Commercial Partners is looking for users or a buyer to fill CoBank’s existing space at 5500 S. Quebec St. in Greenwood Village.
There’s been a shift in tenant activity in downtown Denver, as demonstrated by the accom-panying charts from CBRE.
According to CBRE:• With a year-over-year
increase of 29 percent in total square footage basis, business services leads all industries, with 18 percent of active ten-ants in the market.
• Accounting for 17 percent of current active square feet, the energy industry has seen a decrease of over 500,000 sf in the market in the past year. This slowdown translated to an increase in sublease space. Energy now accounts for 41 percent of the available sub-lease space downtown.
• Technology tenants seek-ing space has soared this year, increasing demand for space on a per-sf basis by 44 percent from a year ago and account-ing for 9 percent of the active tenant mix in the submarket.
• The total amount of sf sought by active tenants rested at 2.8 million sf in July, a 16 per-cent decrease from a year ago.
• As employment contin-ues to expand, downtown is expected to see organic growth from users already in the mar-ket and continued interest from large multimarket users, bolstering Denver’s diversi-fied tenant mix and healthy demand for downtown office space.s
Who’s who among downtown active tenants 2014 vs. 2015 downtown active tenant mix by sf
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 3AA
Health Care
by Jennifer HayesA fully leased medical office
building in Belmar recently traded at $206 per square foot.
The Belmar Medical Building sold for $6.3 million to Ameri-can Realty Capital Healthcare Trust. CHP Belmar Medical LLC sold the building.
Located at 8015 W. Alameda Ave. in Lakewood, the three-story, 30,650-sf building was constructed in 1987 and signifi-cantly renovated in 2012. It is fully leased to tenants includ-ing HCA-HealthOne, Kaiser Permanente, DaVita’s Paladine Health and Laboratory Corpo-ration of America.
Chris Bodnar and Lee Asher of CBRE’s U.S. Healthcare Capital Markets Group teamed with Dann Burke in the Denver market as the seller’s adviser.
Other Newsn Precision Biopsy is the first
commercial tenant to move into the Fitzsimons Redevelop-ment Authority’s new Biosci-ence 2 building, which recently opened.
The 3,839-square-foot cus-tom-built space allows Preci-
sion Biopsy to expand from the prebuilt lab it occupied in Bio-science 1 as the company initi-ates a global commercialization strategy for its real-time tissue classification technology used in prostate biopsy procedures.
Located adjacent to the Anschutz Medical campus in Aurora on property that the University of Colorado pur-chased from the FRA, Biosci-ence 2 is a 112,000-sf multiten-ant building that will combine
university activities with com-mercial uses.
“We are very excited to be the first company to move into this new facility. This space will allow us to expand our resources to bring our Clari-Core Optical Biopsy system to market, providing us with the opportunity to potentially help the millions of patients who undergo prostate biopsy procedures each year,” said Amir Tehrani, CEO of Preci-
sion Biopsy. University of Colorado ten-
ants will occupy the first two floors of Bioscience 2 with the university’s bioengineering program and two other univer-sity entities while the third and fourth floors will be home to FRA commercial organizations.
n Sports Med Properties LLC and The Keith Corp., both out of Charlotte, North Car-olina, recently celebrated the
opening of a Class A sports training, physical therapy and orthopedic center in Highlands Ranch.
The 35,325-sf building at 1060 Plaza Drive houses the 27th location of the national sports training company D1 Sports Training as well as an exten-sion of Panorama Orthope-dic and Spine Center, which offers full orthopedic services, including MRI capabilities, at the building.
D1 is a national sports train-ing and athletic performance company that offers members a chance to train like an athlete.
“The joining of D1 and Pan-orama is the idea partnership, especially in a city like Denver where there is an intense pas-sion for a healthy lifestyle. This facility is a positive addition to the Denver market as the two groups have a strong focus on long-term health, overall well-ness and a desire to give back to the local community,” said Randy Russell, president of Sports Med Properties, which is the national real estate pro-vider for D1 Sports Training.
AM King was both the con-tractor and architect for the project. s
Belmar Medical Building trades for $206 per square foot
The Belmar Medical Building is fully leased to tenants including HCA-HealthOne and Kaiser Permanente.
at DPS he was involved with all of the buildings, dealing with issues such as ventilation, bringing in natural light and even the color of walls that would best further the ability of children to learn.
He brought the first LEED-certified buildings to DPS and worked closely with integrating
charter school buildings into the system.
“I loved my job at DPS and was very happy there,” Leid said.
Then, his old buddy, who was now the mayor of Denver, reached out to him.
“To make a long story short, after several conversations with the mayor and learning about his vision, I joined the
city,” Leid said.His first job was as direc-
tor of Development Services, where he worked on things such as building permitting, inspections and zoning.
His current job is much more high profile.
“I like to say that I come home exhausted at night, and when I wake up in the morn-ing, I can’t wait to get started
again,” Leid said.Leid, 49, has two “beauti-
ful” children, Campbell, who is 12, and Brody, who recently turned 9.
“My wife’s name also is Kelly, which can be a bit con-fusing at times,” he said.
When not working, he loves to coach his son’s baseball team and attend his daugh-ter’s swim meets.
“Campbell is a competitive swimmer and I am her biggest cheerleader,” Leid said.
Leid also is an avid runner.“When I was in my late 20s
and early 30s, I ran six mara-thons, but now I do 5Kʼs and 10Kʼs,” Leid said.
“I love to get out and run. It’s my favorite way to clear my head.”s
Principal Real Estate Inves-tors, a global financial invest-ment firm, is an equity partner in the project. Powers Brown Architecture is leading the design, Adolfson & Peterson Construction is the contrac-tor, and Jason Addlesperger, David Lee and Mike Wafer of Newmark Grubb Knight Frank
are leasing and marketing the project.
The office building, which will target LEED Silver certifi-cation, will have 14-foot, 6-inch ceiling heights, 9-foot-tall win-dows and flexible floor plates.
“United Properties is build-ing new value by creating a suburban Class A spec office product that will provide start-ing lease rates under $20 per
square foot triple-net and the highest SES parking ratio at 5:1,000,” said Addlesperger.
Other new Class A office construction in the submarket is occurring along Interstate 25, so the land is more expen-sive, and it includes structured parking and conventional con-struction, making it costlier to build and driving rates from around $24 to the high $20s per
sf triple net, Addlesperger said. “We fit the profile of larger ten-ants that are looking for more efficient space,” he said.
“The economic advantages at Inova Dry Creek include a very competitive mill levy compared to other SES loca-tions,” he added.
The building will be com-pleted in late 2016.
The Inova Dry Creek campus
will include dedicated areas for biking, lockers, showers, a bike repair area and rentals, and quick access to transit-oriented development and the light-rail station at I-25 and Dry Creek. Adjacent to Topgolf and close to Centennial Airport, the development will include pre-mium finishes, expanded park-ing, on-site restaurant space and space for a food truck.s
one of them, and we have six additional buildings available for build-to-suits that total about 300,000 square feet, and we’ve got activity on those also. This central market is a very tight market.”
Principal Real Estate Investors is Trammell Crow’s capital part-ner on the first phase.
“We are excited to partner with Trammell Crow Co. on this rare, institutionally sized central Den-ver industrial site. The central Denver market continues to be tight, with around a 2 percent vacancy rate, and we expect leas-ing velocity to be strong,” said Kevin Anderegg, Principal Real Estate assistant managing direc-tor in asset management.
Buildings in the approximately $55 million first phase of develop-ment front East 55th Avenue on the side of Washington Street it unincorporated Adams County. Contractor Murray & Stafford is scheduled to complete construc-tion in the first quarter. Ware Mal-comb is the architect.
Along with the future build-to-suit sites designed for sale or lease to users from 17,600 to 69,350 sf, Crossroads Commerce Park will total approximately 1 million sf.
The site is being purchased from Globeville I LLC, an Envi-roFinance Group company that oversaw horizontal land devel-opment over the course of several years.
EFG Executive Vice President Cameron Bertron recently called
the redevelopment “a huge accomplishment for Adams County and Denver.” The site, which was “a source of anguish and worry for that area and neighborhood for decades and generations is now clean” and now will create jobs that will greatly benefit that part of Den-ver and Adams County, he said. “It’s really the proverbial win-win.”
Mike Wafer and Tim D’Angelo of Newmark Grubb Knight Frank brokered the land sales for Phase 1 and are marketing the site for Trammell Crow.
Len McBroom of McBroom Co. represented Empire Staple in its build-to-suit transaction. Empire Staple will relocate to Crossroads Commerce Park from 1710 Platte
St. in Denver. “The company has been look-
ing for a new location from our current location on Platte street for about five to eight years,”
said Empire Staple Co. owner Bill Spicer. “This location of 58th Avenue and I-25 has always been, in my mind’s eye, the right place to be.”s
Leid
Inova
Crossroads
Continued from Page 1AA
Continued from Page 2AA
Continued from Page 1AA
Empire Staple Co. will occupy a build-to-suit at Crossroads next year.
Page 4AA — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
Industrial
by Jill Jamieson-NicholsA Class A office/warehouse
building in Concord Business Center sold to a Boulder investor in a $5.22 million, off-market deal.
Cary St. Onge bought the 54,280-square-foot building at 8530 Concord Center Drive at a 7.5 percent cap rate. Case Con-cord LP, a user/investor, sold the property just after Lewan and Associates inked a lease for the last available 24,080 sf.
Listing broker Peter Beugg of JLL said the seller planned to
begin market-ing the prop-erty once the Lewan lease was signed, but the inves-tor surfaced before that o c c u r r e d . “There are very few opportunities
to buy southeast,” said Beugg, who added that the opportunity to purchase a property at a 7.5 percent cap in the tight southeast
submarket was very attractive.The price per sf was $96.20.Technitix LLC and Elevation
Volleyball are tenants at the prop-erty, which is just off Peoria Street and E-470, near Centennial Air-port. The building offers 24-foot ceiling height, ESFR fire protec-tion, and dock-high and drive-in loading.
Tyler Reed and Dominic DiOrio of JLL were the co-listing brokers.
Other Newsn Cross Development LLC paid
$2.95 million, or $132 per square
foot, for a 22,414-sf office/ware-house building on 2.63 acres at 6691 Colorado Blvd. in Com-merce City. Caliber Collision will use the property for an auto body shop.
GEP Investments Inc. sold the property, which consists of 19,396 sf of clear-span ware-house space and 3,018 sf of office build-out. The building has radiant heat and six drive-in doors. The yard is fenced and paved.
John Segelke of Segelke Real Estate LLC was the list-ing broker. Tyler Carner and
Jeremy Ballenger of CBRE rep-resented the buyer.
n Tenbar Inc., a local indus-trial property investor, paid $1.35 million, or $135 per sf, for a 10,000-sf, fully occupied building at 201 S. Rio Grande Blvd. in Denver.
“The high price of $135 per square foot is an indication of the central market value,” Rus-sell Gruber of Newmark Grubb Knight Frank, who represented the buyer, said in an announce-ment. “Sale activity for indus-trial buildings has been robust in recent years, driven by the owner, user and investment sales. Increasing rental rates attract investment buyers and prompt users to purchase their own buildings. The continua-tion of historically low vacancy in the central submarket will push prices and rental rates up in the coming months.”
Longtime owner 201 Rio Grande LLC sold the build-ing. Tuff Shed will remain at the property, as will subtenant Brekhus Marble and Granite.
Murray Platt of CBRE was the listing broker for the property, which reportedly received mul-tiple offers.
n Aramark leased the last space in a 91,961-sf building at 9600 E. 40th Ave. in Enterprise Business Center in Denver. The company signed a 10-year lease for 30,588 sf, which will be used by its refreshment services divi-sion, according to Drew McMa-nus of Cushman & Wakefield of Colorado Inc., who repre-sented the tenant.
Mike Wafer and Tim D’Angelo of Newmark Grubb Knight Frank represented the landlord, United Properties, in the transaction.
n RMIP 7281 54th 1 LLC purchased a 15,000-sf industrial building at 7281 E. 54th Ave. in Commerce City for $1.28 million. JLL’s Peter Beugg and Tyler Reed secured a seven-year lease with Acuren prior to selling the property for owner Fleet Direct. s
Concord industrial building sells off market in $5.22M deal
The last space in the building at 8530 Concord Center Drive was leased while the property was under contract.
by Jill Jamieson-NicholsTenants are paying 20 to 25
percent more for Class A and B industrial space in Denver than they did prior to the reces-sion – if they’re lucky enough to find it.
Overall vacancy for ware-house/distribution space dropped to a record low 4.3 percent at the end of the second quarter. New development is being leased up before it can be delivered – a phenomenon that, while not unique to Denver, hasn’t occurred here in previ-ous cycles.
“It’s a period of time in Denver like we’ve never seen before,” said Mark Bowen, senior vice president for DCT Industrial Trust.
“When the market gets below 6 percent vacancy, it really war-
rants new c o n s t r u c -tion, and it’s been below 6 percent for some time now. There has been new construction, but it hasn’t kept up with demand –
and a lot of it is new demand.”DCT, a Denver-based indus-
trial real estate acquisition, development, leasing and man-agement company with approx-imately 73.3 million square feet of properties, owns just under 1.7 million sf in Denver’s largest (Interstate 70 east) and tightest (central) industrial submarkets. “In our (Denver) portfolio, we’re 100 percent occupied. We don’t have any vacancy,” said Bowen.
The company’s tenants are staying put, as are tenants throughout the market. “They go out and explore the market, thinking you’re crazy with your rental rates, and they see that is the market. They have no place to go, so there’s very little movement,” Bowen said.
“I get calls daily asking, ‘Do you have anything?’ and ‘Are you building anything?’”
DCT Industrial Trust, looking to grow its Denver portfolio, has a small piece of land under contract with a goal of acquir-ing more property around it. The company only buys land it expects to develop and lease up within 24 months, and Bowen doesn’t expect a problem in today’s market.
It’s also targeting Denver acquisition opportunities, which don’t come around often
and meet with fierce compe-tition from national investors. DCT bought the 689,557-sf Air-port Distribution Center near Interstate 70 and Chambers Road in Aurora earlier this year.
Unlike Houston, Southern California or some of the other markets in which DCT is active, “Denver is still, and in my opin-ion will always be, a regional market that supplies and dis-tributes up and down the Front Range region. We’re a regional market that is getting bigger because more people want to be here.”
It’s also a diverse market, fueled by residential construc-tion, companies that service the energy industry and technol-ogy, Bowen said. “Denver’s really learned to diversify bet-ter than a lot of markets that I see, and it means when we do
fall, we don’t fall quite as hard as we did in the past. That’s evi-denced by our last recession.”
Admittedly, “It’s good that land prices are little higher, it’s good that the (entitlement) pro-cess is a little harder to get through than in other markets because we’re holding supply in check, and yet it’s not shut off,” said Bowen.
Bowen, who also oversees DCT Industrial Trust’s Seattle and Phoenix markets, said he wouldn’t mind doubling the size of the company’s Denver portfolio, but said growth will be deliberate and based on a long-term view.
“You can’t get too comfort-able with where we are right now. Supply will catch up, and demand will waver at some point. We just don’t know when.”s
Denver market one for the books, says DCT’s Mark Bowen
Peter Beugg
Mark Bowen
We had a client tell us recently, “I made one mistake during the
Great Recession and that is that I actually underwrote the deals and did not buy everything I could.” Since the depths of the Great Recession, the Denver industrial market has experienced 21 quar-ters of positive absorption, 7.6 percent rent growth year over year and vacancy has reached a historic low. While this statement is meant with a little sarcasm, it also begs the question, “Where are we in the cycle?”
Past the halfway point of 2015, the Denver industrial market continues to fire on all cylinders with both continued improv-ing property fundamentals and equally strong capital markets results.
The list of positive statistics for the Denver industrial market could read like the announce-ment of a future champion boxer entering a ring. “In the Denver
corner, com-ing off 21 win-ning quarters of absorption, k n o c k i n g down 628,434 square feet of space this quarter alone, d e l i v e r i n g fully leased speculative buildings at ease and with a metro unem-
ployment rate of 4.2 percent, the future is bright for this rising star that PricewaterhouseCoopers rated a top five city to invest in nationally.” We are all aware that the market is strong and that Denver is receiving a lot of national notoriety. There is a rec-ognized pulse and energy that is being observed and this is mak-ing everyone act a bit differently. Predicting exactly where we are at is not something that we have
the courage to put in writing, but we do see that there is opportunity for both sell-ers and buy-ers in the Den-ver industrial market.
The case for Denver is intriguing as the aver-age cap rate
nationally for Class A industri-al space is 5.9 percent with an average rental increase last year nationally of 4.8 percent. In com-parison, Denver has only expe-rienced one sub-6 percent trade (partially due to not one mult-itenant Class A trophy asset trad-ing this cycle in Denver) and has experienced rental rate increases of 7.6 percent year over year and over 20 percent in some mar-kets. If you couple these attrac-
tive real estate statistics with the 4.2 per-cent Denver u n e m p l o y -ment rate, the 61,300 expected new jobs in 2015, a population increase of 84,000 people last year alone and the story
for capital being in Denver, the case becomes clear.
Capital is increasingly aggres-sive in our market and coming from an increasingly diverse set of buyers. Foreign capital accounted for 20 percent of the industrial asset volume last year, up from an average over the 6 percent from the years prior. We have witnessed foreign groups purchasing and bidding on assets from the likes of Germa-ny, Canada, Mexico and Singa-
pore. Further, private capital has been the most active buyer type, accounting for 43 percent of activ-ity nationally. There is a trend of institutional groups assembling smaller assets piece by piece and combining them into a portfolio.
The most significant trans-action of the first half of 2015 was the GLP (Government of Singapore) purchase of the Ind-cor portfolio. This was a nation-al portfolio sale that we were involved in, of which the Denver piece was eight buildings repre-senting about 1.4 million sf in this market. Also significant was the sale of the W.W. Reynolds Fort Collins portfolio, which consisted of 20 buildings and 507,112 sf for $53 million and with which we also were involved.
The market has opportunity for buyers to capitalize on the strong market trends and for sellers to realize strong gains. Heading
Making the case for Denver area’s industrial market
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 5AA
Multifamily
est from buyers, if the rents had been stabilized.
“It was still in lease-up stage and some buyers of these core-asset deals prefer to buy after the rents have been stabilized,” Koster said.
Still, there were multiple offers on the property, which is passed each day by 34,000 vehicles on Broadway and is visible from Interstate 25, which has a daily traffic count of 200,000.
Greystar liked 1000 S. Broad-way for the same reasons that drew Fore to the site, Koster said.
“It’s not unlike what is hap-pening in River North,” Koster said.
“At first, people are like, ‘What are you doing here?’ Now, everyone is seeing all of the growth happening; it seems so obvious that was going to take off.”
Not only are first-class apart-ment communities a sign of how attractive these urban neighborhoods are to millenni-als, but they also are changing the urban fabric of them, she said.
“Often, these new apart-ments are the catalyst for even more developments,” Koster said.
Greystar and other prospec-tive buyers, like Fore, liked the 1000 S. Broadway site because of its proximity to light rail.
At the same time, 1000 S. Broadway is in a class by itself,
as far as other urban, infill sites, she said.
“What 1000 S. Broadway has going for it that no other devel-opment has is that it is across the street is a 40-acre site to be developed,” probably most-ly into industrial and offices, Koster said.
“This is an area that is really evolving and is going to change, especially with a 40-acre development across the street,” she said.
Other Newsn Alta Bridge Square LLC
paid $12.18 million for the 168-unit Bridge Square Apartments at 80 S. 18th Ave. in Brighton.
Continued from Page 1AA
A Las Vegas company recently sold this 260-unit apartment community on the former Gates Rubber site.
Please see Apartment, Page 6AA
CREJ.com/loan-calculator
THINKING ABOUT A COMMERCIAL REAL ESTATE INVESTMENT?
CREJ’s Loan and Investment Calculators just made your decision making easier.
f Mortgage Comparison Calculator Weigh your loan options based on loan amount, interest rates, amortization period and loan term.
f Solve for the Unknown Solve for your loan amount, mortgage payment, amortization period or loan term, even if you only have 3 out of 4 pieces of information.
f Mortgage Calculator with Amortization Schedule Estimate your monthly, annual, and balloon payments.
f How Much Can I Pay for a Property? Estimate how large of an investment you can make.
Page 6AA — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
The seller was Brixton Stratford Square LLC.
It sold at a cap rate of 7.5 percent, said Brian Haggar of Marcus & Millichap, an associate who handled the transaction.
“There was quite a bit of interest” in Bridge Square, Haggar said.
The Brighton submarket is very tight and Bridge Square is the only apart-ment community built in the 1970s in the area with more than 50 units that was on the market, he said.
He said the only other market deals of more than 100 units available are the Platte View Landing, built in 2003, and the Solaire, built in mid-2014.
The buyer of Bridge Square “is tak-ing advantage of a huge demand for affordable market-rate units at a lower rate than the newer product,” Haggar said.
The community has new mansard roofs and seven of the eight boilers are new, he said.
In addition, the elevators, leasing office and pool all have been renovated.
Bridge Square is in “good shape, overall,” Haggard said.
The new owners, he said, will be able to raise rents.
They also will get additional rent increases beyond the “organic” market
from cosmetic updates to units, he said.
n An unidentified buyer paid $2.87 million, or $110,481 per unit, for a 26-unit apartment building built in 1972 at 2290 S. Oneida St. in Denver.
The property is surrounded by mature landscaping and backs up to the Highline Canal Trail.
Jeff Johnson and Greg Breslau, with the Johnson Ritter Team at Pinnacle Real Estate Advisors, represented both the buyer and the seller in the transac-tion.
“This building is a unique and rare multifamily property located between downtown Denver and the tech cen-ter,” Breslau said.
“The property was well maintained by the seller with numerous capital improvements,” he added.
“The buyer plans to hold the prop-erty long term and gradually renovate the units to keep up with Denver’s increasing rental market,” he said.
n An unidentified buyer paid $397,000, or $79,400 per unit and $149.25 per square foot, for the five-unit Regis Flats apartment building at 4402 W. St. Claire Place in Denver. Josh Newell, a senior adviser at Pinnacle Real Estate Advisors, represented the local seller in the transaction.s
toward 2016, industrial drivers continue to be a bright spot in the widespread economic recovery taking place here in the United States, and capital continues to
flood into U.S. Treasurys, driving down interest rates and making growth markets like Denver great targets for buyers of industrial real estate of all sizes. Despite this, we expect the imbalance of sellers to buyers to continue.s
Page 8AA — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 9AA
Retail
by John RebchookArciTerra Group recently
paid just under $19.4 million for the 135,751-square-foot Seven Hills Plaza shopping center in Aurora.
The purchase apparently was the first Denver-area acquisi-tion by Phoenix-based ArciT-erra.
“I believe it was their first local acquisition,” said Mat-thew Henrichs, who listed, marketed and sold the property at East Hampden Avenue and Tower Road with fellow CBRE broker Brad Lyons.
There was a lot of interest in the property from prospec-tive buyers, which is typical in today’s hot Denver area retail market.
“I will tell you, generally speaking, we always have quite a few offers on all of our list-ings and Seven Hills Plaza was no different when we ran it through the listing process,” Henrichs said.
The sale price was the equiva-lent of $142.89 per sf.
“ArciTerra is a syndication group and one of the things that really appealed to them is that they purchased it priced well below replacement cost,” Henrichs said.
The head of ArciTerra could not be reached by press time. But according to ArciTerra’s website, among other asset types, it is interested in mult-itenant retail centers and well-anchored neighborhood com-munity centers and value-add opportunities.
ArciTerra targets properties priced from $2 million to $250 million.
Seven Hills Plaza, built in 1985, was sold by a Minne-apolis-based group called CRE Aurora LLC.
It had a fairly high vacancy rate when it sold.
“It was about 86 percent occupied at the time of the sale, which really gave it great value-add potential,” Henrichs said.
“These types of assets are very sought after, because there is a very limited supply of them on the market,” Henrichs said.
He said several letters of intent already were in the works at the time of the sale.
The property is continuing to be leased by Rich Otterstetter and Jeff Germain of the Crosbie Group.
Spaces are available from 1,200 sf to 8,510 sf, according to a Crosbie Group brochure.
The anchor tenant is the Movie Tavern, which takes 35,974 sf.
Other tenants include:• 24 Hour Fitness, 9,200 sf;• Napa Auto Parts, 6,152 sf;• Music Go Round, 6,000 sf;• Encore Dance, 5,100 sf;• Crossroads Bible Church,
4,000 sf; • Play it Again Sports, 3,680
sf; and• 7-Eleven, 2,560 sf. “There also is a Natural Gro-
cer’s by Vitamin Cottage that is under construction nearby the property,” Henrich said.
“The Natural Grocers wasn’t part of the collateral, but it kind
of shadow anchors it,” he said.Seven Hills Plaza has a great
location, he added.“It is at a very strong regional
intersection of Hampden and Tower,” Henrichs said.
“It is an area that has very strong demographics,” he said.
Indeed, the average house-hold income within a one-mile radius of Seven Hills Plaza is $75,781. Within a three-mile radius it is $79,968.
Other Newsn Sigma Systems Inc. paid
$1.7 million for an 8,900-square-foot building on a 23,400-sf site at 2305 S. Colorado Blvd. in Denver. Sean Kulzer, Mike DePalma and David Dobek of SullivanHayes Properties represented the buyer in the transaction.
n An unidentified buyer paid $968,400 for the 12,258-sf Ralston Trade Center at 9840 W. 59th Place in Arvada. The
multitenant building was fully occupied at the time of the sale.
Justin Krieger and Jeff John-son of Pinnacle Real Estate represented the buyer from California that purchased the property as part of a 1031 exchange.
“The demand for retail prop-erties in metro Denver remains strong,” Krieger said.
He said a number of buyers wanted the Ralston Trade Cen-ter, as it is a value-add deal.
“The low in-place rents and nearby proposed developments created a lot of buyer interest in this property,” Krieger said.
“In addition, the fact that the property was priced just below $1 million also got a lot of atten-tion because it’s getting harder to find multitenant retail prop-erties in metro Denver at that price point,” Krieger said.
n AutoZone leased 7,240 sf at 5365 S. Wadsworth Blvd. in Littleton. AutoZone was rep-resented in the transaction by Courtney Dahlberg Key and Donald M. Miller of Sullivan-Hayes Properties.
n Carefree Spas leased 6,500 sf from Kimco at the Market at Southpark at 7937 S. Broadway in Littleton. Courtney Dahl-berg Key and Brian Shorter of SullivanHayes Properties represented Kimco in the trans-action.
n Highland Tap & Burger leased 4,595 sf from Sloan’s Lake Apartment LLC at the Sloan’s Lake Alexan apartment community being developed by Trammell Crow Residen-tial at 1565 Raleigh St. in the Sloan’s redevelopment of the former St. Anthony Hospital site across from Sloan’s Lake in northwest Denver. Sean Kul-zer, Mike DePalma and David Dobek represented both sides in the transaction.s
Orchard Town Center welcomes new tenants
Orchard Town Center, a 914,000-square-foot open-air retail center, announced that seven new retailers will open at various times over the next several months.
Bitto Bistro is the new opera-tor of the former Wine & Cheese Restaurant and Wine Bar.
Katie Eile is an Irish restau-rant and pub, and an affiliate of Katie Mullen’s in downtown. The restaurant will occupy 6,644 square feet.
Crushed Red is a fast-casual restaurant offering chopped-to-order salads and fresh-stretched pizza. Crushed Red will operate a 2,673-sf space.
Designer optical eye care cen-ter, 20/20 EyeVenue will open a 3,085-sf space.
Rusty Bucket Restaurant and Tavern is a casual tavern offer-ing comfort food. Rusty Bucket will occupy 4,500 sf.
Marshalls is a discount retail
chain that will open a 23,000-sf store.
Maurices is a 5,000-sf store, offering fashion for women.
“Since acquiring the property, our goal has been to significant-ly upgrade and rebrand the cen-
ter with new amenities, while bringing in new retailers,” said David Malin, vice president of acquisitions and development at Vestar. “We will continue to enhance the customer’s shop-ping experience, and are focused
on maintaining a vibrant and exciting tenant mix.”
Orchard Town Center is located at 14697 Delaware St. in Westminster.
New-to-market retailers join Cherry Creek
As Cherry Creek Shopping Center prepares for the grand opening of its four-level RH Denver, The Gallery at Cherry Creek, it announced new retail-ers that will be opening in the redeveloped space.
Tory Burch is an American lifestyle brand that is known for color, print and eclectic details, offering shoes, handbags, watches, accessories, and home and beauty products.
David Yurman is a fine jewelry and luxury timepiece designer for men, women and children.
The remodeled valet plaza will feature new restaurant, 801 Chophouse. The restaurant offers USDA prime beef, jet fresh fish and an award-win-ning wine list.
Cherry Creek Shopping Cen-ter is located at 3000 E. First Ave. in Denver.
Park Meadows adds restaurant and retail
Park Meadows Mall wel-comes a new restaurant and two new retailers.
The Melt offers hamburgers, grilled cheese sandwiches and hand-crafted fountain sodas. The 708-square-foot store is the first location outside of Califor-nia.
Lolli & Pops is a candy shop offering unique sweets from all over the world, including choc-olate from Madagascar, sour-belts from Spain and sodas from Japan. The 2,050-sf store is the only location in Colorado.
Ivivva, created by Lululemon, creates athletic wear for active girls. The 2,025-sf store is the first location in Colorado.
Park Meadows Mall is located at 8401 S. Park Meadows Center Drive in Lone Tree.s
CBRE sells Seven Hills Plaza in $19.4 million transaction
Seven Hills Plaza is at East Hampden Avenue and Tower Road.
Seven Hills Plaza in Aurora recently sold.
Orchard Town Center, located in Westminster, announced seven new tenants will move in.
Page 10AA — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
Arvada Economic Develop-ment Association launched a free online tool called SizeUp, which is designed to help local busi-nesses grow by making smarter decisions through data analysis.
SizeUp is located on the AEDA website and allows businesses to easily obtain specific data on revenues, salaries, supplier loca-tions and more.
“We are thrilled to offer our local businesses these free online tools that will help them suc-ceed,” said Ryan Stachelski, director of AEDA. “Now our business owners can instantly
access advertising, demograph-ic, industry, geographic and cost-of-business data.” Specifically, SizeUp crunches data points from public and private sources to provide four main tools.
• Performance benchmark-ing: See how a specific business "sizes up" by comparing its per-formance to all competitors in its industry;
• Competitive assessment: Map where competitors, cus-tomers and suppliers are located to determine where to better serve customers;
• Best places to advertise:
Identify areas with the highest revenue for an industry, the most underserved markets, and filter for the best location based on demographic and business char-acteristics; and
• Demographic analysis: View an interactive map of demo-graphic, labor and customer expenditure data in your area.
“Our goal is to help business-es in Arvada succeed by mak-ing it simple to access relevant and powerful data across every industry,” said Anatalio Ubalde, CEO of SizeUp. s
Arvada Economic Development Association
AEDA launches online tool to help local businesses grow
The Denver Office of Eco-nomic Development approved a $300,000 small-business loan to NextHealth Technologies, a local early stage company in the field of health care predictive analyt-ics and behavioral economics. The financing will help fund the firm’s expansion in Denver.
NextHealth’s mission is to improve outcomes and reduce costs by helping patients make more informed choices about their health. The company reports that its customers are seeing a 20 percent reduction in emergency room visits and costs within a targeted Medicaid pop-
ulation. NextHealth’s platform incorporates advanced analytics, behavioral economics and con-sumer engagement techniques to predict risk and prescribe per-sonalized member-level actions or “nudges" to improve out-comes.
“We were attracted to NextHealth on multiple levels,” said OED Executive Director Paul Washington. “Their experi-enced executive team, particular-ly CEO Eric Grossman’s success with TriZetto and other entre-preneurial ventures in this very competitive field, has a prov-en track record. Their commit-
ment to being in Denver and the exceptional quality of the techni-cal jobs they’re creating were also major factors that strongly fit our lending strategy.”
The firm leased office space at 1675 Larimer St. and plans to quickly grow from 15 to 60 tech-nical development jobs within three years.
Through the OED’s Revolving Loan Fund program, NextHealth Technologies is receiving a loan to finance a portion of the costs associated with its expansion. The gap-financing program lends up to 25 percent of project costs.s
Denver Office of Economic Development
Denver OED approves loan for NextHealth Technologies
Denver ranked No. 1 among best places in the United States for business and careers, accord-ing to Forbes.
According to the magazine’s 17th annual list of Best Places for Business and Careers, Den-ver ranks No. 1 for the first time, moving up from a fourth-place finish in 2014.
The Denver-Aurora-Lake-wood metro area, home to 2.8
million people, is attractive for its diverse economy, highly educated labor force and out-door recreational opportuni-ties, according to the report, which crunched numbers on the 401 metropolitan statistical areas in the U.S. to gauge the best and worst business cli-mates. Companies are increas-ingly choosing Denver as the site for new operations or to
relocate, noted Forbes.
Updates…n ZenPayroll is expanding
and adding a new office in Den-ver with plans to hire more than 100 full-time employees imme-diately and 1,000 people in the next few years.
As part of ZenPayroll’s exten-
Metro Denver Economic Development Corp.
Denver tops in nation for business and careers, says Forbes
The City Council of Commerce City unanimously approved Ordinance 2060, which amends the municipal code concern-ing the repair of construction defects.
Commerce City becomes the sixth community to enact leg-islation that will encourage the development of owner-occu-pied multifamily housing with-in the region.
The ordinance, which applies to new construction within the city after Aug. 1, 2015, cites the city’s zoning ordinance and comprehensive plan, which contemplates a diverse hous-ing stock consisting of a mix of single-family and multifamily developments (both owned and rented units) designed to serve the needs of all Commerce City residents. In the last year alone, the city has lost approximately 2,000 entitled multifamily units due to downzoning requests.
“As the state’s fourth-fastest-growing community, having a variety of housing options with-in the city is critical to meeting our vision of a quality commu-nity for a lifetime,” said Mayor
Sean Ford. “Commerce City has not approved a new con-dominium/multifamily project since 2008. I am hopeful that our action this evening will spur new conversations with our industry partners to meet the needs of our diverse, 51,762 residents.”
With the Regional Transporta-tion District’s new N line bring-ing a commuter rail line station on line in 2018, the widening of Highway 2 spurring redevelop-ment inquiries in the Derby Dis-trict, and redevelopment plan-ning of the former Mile High Greyhound Park underway, the lack of condominiums within the city for young families and a growing senior population poses a significant challenge, the city noted.
“The purpose of cities is to develop great communities, full of economic opportunity, recre-ation, arts, culture and unique places in which its citizens live. The actions of the Commerce City Council this evening are an apt demonstration of the city’s eagerness to serve as a leader in the metropolitan region by
providing housing choices for its existing residents and those who continue to arrive,” said Tom Clark, chief executive offi-cer of the Metro Denver Eco-nomic Development Corp. and executive vice president of the Denver Metro Chamber of Commerce. “We applaud the city’s commitment to encourage diverse housing opportunities and to ensure that there will be a place for any resident who wants to live in this community for many, many years to come.”
In December 2014, City Coun-cil approved Resolution 2014-98, adopting the city's legisla-tive policy principles and iden-tified the issue of owner-occu-pied housing and construction defects as a specific advocacy area. After the lack of mean-ingful construction defects liti-gation reform during the 2015 legislative session, City Council requested staff bring an ordi-nance for consideration, simi-lar to those adopted by other metropolitan municipalities, to encourage owner-occupied housing within Commerce City.s
Commerce City
Commerce City enacts local construction defect repair law
Economic Development News
Please see Metro Denver, Page 11AA
For complete contact information, links and Key Facts, visit our Web site, www.crej.com.
Adams County Economic Development
Arvada Economic Development Association
Aurora Economic Development Council
Boulder Economic Council
Brighton Economic Development Corporation
City and County of Broomfield
Castle Rock Economic Development Council
City of Centennial
Colorado Springs Regional Business Alliance
City of Commerce City
Denver Office of Economic Development
Denver South Economic Development Partnership
Downtown Denver Partnership Inc.
City of Englewood Community Development Dept.
Town of Erie
Federal Heights Redevelopment Agency
Grand Junction Economic Partnership
City of Greenwood Village
Jefferson County Economic Development Corp.
City of Lafayette
Lakewood Economic Development
City of Lone Tree
Longmont Area Economic Council
City of Louisville
Metro Denver Economic Development Corporation
Northern Colorado Economic Development Corp.
City of Northglenn
Northwest Douglas County EDC
Town of Parker
Pueblo Urban Renewal Authority
City of Thornton Office of Economic Development
Town of Superior
Westminster Economic Development
City of Wheat Ridge
Wheat Ridge 2020
Town of Windsor
For information regarding appearing in the EDC Profile Section, please contact Jon Stern at 303.623.1148
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 11AA
JLL added George Baker to its capital markets practice in the Rocky Mountain Region.
Baker, a managing director, will focus on sourcing debt and equity for all prop-erty types. He will partner with Executive Managing Director Tom Fish, based in the Hous-
ton office, as well as the rest of Denver’s capital markets experts, to provide full-service expertise to clients.
Baker joins the full-service global provider of capital solu-tions for real estate investors and occupiers from Capital Creek Investments LLC, where he was an owner-managing principal, specializing in the financing of middle market real estate transactions. Prior to Capital Creek, Baker was a managing partner and the chief investment officer at Montecito Medical, a medical real estate firm. He also has experience in multi-unit franchise develop-ment as one of the first franchi-sees of Blockbuster Video. He earned his bachelor’s degree from University of Texas at Austin.s
Laura B. Redstone, a real estate attorney with more than 20 years’ experience with com-mercial property transactions, joined Ballard Spahr as of counsel in the firm’s Denver office.
Redstone handles all aspects of commercial real estate trans-actions, including drafting and negotiation of retail, office and ground leases. She also handles purchase and sale contracts, title insurance matters, con-struction contracts, easements and documentation for the creation of condominium and
common-interest communities.Redstone also helps clients
create and maintain busi-ness entities in connection with commercial transactions, and drafts operating agree-ments, articles of incorpora-tion, bylaws and independent contractor agreements. She negotiates and closes complex financing transactions, includ-ing portfolio, mezzanine, acquisition, construction and permanent mortgage loans, as well as loan workouts.
Redstone has handled com-plex transactions involving a variety of property types, from retail, office and industrial to multifamily residential and single-family residential devel-opments. She represents lend-ers and borrowers in financing transactions nationwide and has experience with multistate registrations of vacation owner-ship projects and the acquisi-tion of land for development of wind tower and turbine manu-facturing facilities.
She rejoins the law firm from Kirschenbaum Jansen in Boul-der. She was an associate in the Ballard Spahr real estate depart-ment from 1998 to 2004.s
Curtis Sears has become of counsel to Coan, Payton & Payne LLC.
Sears graduated from the University of Colorado School
of Law in 1992 and has practiced law in Colorado and Texas at both small and large firms. He also has been actively involved in real estate
development, construction and brokerage throughout his career. He also served as a director of a commercial bank.
Additionally, Sears teaches
real estate courses at the Leeds School of Business at the Uni-versity of Colorado and previ-ously taught real estate courses at the College of Business at Colorado State University.
He also serves as the faculty sponsor and coach for CU’s real estate case competition teams.
Sears has significant experi-ence with complex real estate, development and construction related matters, which will be his primary focus at the law firm.s
The Health Care Institute, an IFMA Alliance Partner, elected Mike Wood to serve as its next president.
Effective in September, Wood will replace Leo Gehring, who will continue to serve the insti-tute as immediate past presi-dent.
Wood is currently vice presi-dent of HCI and director of health care market develop-
ment for Old-castle, where he is respon-sible for building and managing the company’s health care integrated delivery busi-ness, working with internal
business units and various mar-kets to serve planning, design and construction professionals as well as owners.
Wood formerly served as facilities director for Kaiser Per-manente.
Wood holds certifications and licenses in health care project management, facilities manage-ment, health care construction, radiologic technology, emer-gency medicine and real estate brokerage. He is a past regional vice president of IFMA and past president of two IFMA chapters.s
Who’s News High Fives!
Proceeds of Mortenson’s ninth annual golf tourna-ment at Fox Hollow Golf Course in June will benefit the Gold Crown Founda-tion, a Denver-based non-profit that raises funds and awareness for local children’s charities.
Mortenson’s fundrais-ing efforts and its sponsor’s contributions resulted in a $30,000 donation to Gold Crown. The contribution will help the organization achieve its vision to enrich the lives of children.
“We’re proud to be able to help support Gold Crown’s efforts,” said Maja Rosen-quist, vice president and gen-eral manager at Mortenson. “Stewardship is a corner-stone of our business and we appreciate all the support we received from our trade part-ners who helped us sponsor
this event,” she added. Tournament sponsors
included: Dynalectric, Sie-mens, Fiore, Puma Steel, Encore Electric, Concrete Frame Associates, Rolling Plains, Belair Earthwork, LPR Construction, Martin Marietta, Linx, Kelley Truck-ing, Martin/Martin Consult-ing Engineers, US Engineer-ing, Pie Consulting, Space-con, Bestway, Universal Forest Products, DRG, Tem-pair, United Rentals, Lud-vik Electric, Harmon, Rocky Mountain Prestress, Desman, MHED, Anderson Drilling, Berg Electric, B&M Roofing, Gen3, MTech, RMH Group, Murphy Mechanical, AAA Waterproofing, ISEC, Envi-ronmental Landworks Com-pany, Ferguson, Johnson Controls, The Weidt Group, KL&A Engineers, IMI and ARC Printing. s
Mortenson golf tournament raises $30,000 for Gold Crown Foundation
Gene Hodge, center, and Maja Rosenquist present a check to Bill Hanzlik (pictured next to Rosenquist) and the Gold Crown Foundation.
High Fives! recognizes good deeds and accomplishments by companies and individuals in the Colorado commercial
real estate industry. Please share your good news and photos with us by emailing [email protected].
Submissions should be 200 words or less.
George Baker
Curtis Sears
Mike Wood
buyers for the building. The asset represents a unique opportunity to secure a large office space in the southeast suburban submar-ket.
“We’re enthusiastic to find a replacement tenant for CoBank, in approximately 180,000 square
feet of office space. This will be one of the largest blocks of stand-alone contiguous office space in the market, at a lease rate that will be significantly below newly constructed buildings. In addi-tion, this building has unimped-ed Western views and is within walking distance of the Land-mark retail project,” said Watson.
“This is a great buy, even though the anchor is moving in March 2016,” said John Winslow of Win-slow Property Consultants, who was not involved in the transac-tion. Winslow noted the property is close to Greenwood Athletic Club, one of the premier athletic clubs in the country.
CoBank occupies 178,980 sf of
the building. Waste Management occupies the remaining 21,707 sf on a lease that extends through first-quarter 2019.
The three-story building was constructed in 1982-83 and offers 68,315-sf floor plates. It has immediate access off of Interstate 25 and is within walking dis-tance of the Orchard light-rail sta-
tion. There are 230 underground parking spaces, a full-service café space and mountain views.
In addition to turning around vacant and distressed commer-cial real estate, Northstar Com-mercial Partners also purchases real estate for and from national corporations in Colorado and nationally.s
sive search to find a city that sup-ports its rapid growth, Denver became the clear choice because of the city’s quality of life, inno-vative culture, ideal economic environment and wealth of top talent, according to the firm. Having announced support for
businesses nationwide earlier this year, ZenPayroll will use its new central location to better meet its customer needs.
“Denver is a vibrant, grow-ing city where we are excited to expand our footprint, hire kin-dred spirits and better serve our customers across the country,” said Josh Reeves, CEO and co-
founder of ZenPayroll. “We are also eager to get involved locally as an active, responsible mem-ber of the Denver community.”
“ZenPayroll’s expansion adds to the growing list of innovative technology companies that have chosen to make a significant investment in Colorado,” said Gov. John Hickenlooper. “We
are confident that our state's business-friendly environment will provide ZenPayroll with the support that the company needs to excel. We look forward to tracking the company's growth over the next few years and see-ing its positive impact on our economy.”
ZenPayroll launched in 2012
and currently processes billions of dollars in annual payroll for tens of thousands of small businesses across the country. ZenPayroll’s second location in Denver will be the main hub for its customer service teams. The new office will be in the heart of downtown Denver near Union Station.s
Summer Commencement CeremonyFriday, August 14th8:30 amCarnegie GreenUniversity of Denver Campus
Executive Real Estate Roundtable (ERER) Breakfast MeetingsThursday, September 10 & October 8, 20157:30-9:00 amUniversity of Denver CampusDaniels College of Business
2015 Mountain & Western Slope Real Estate Summit October 2, 2015 The Viceroy Hotel ResortSnowmass, Colorado
All Daniels Alumni & Friends Receptionimmediately following the Mountain Summit October 2, 2015 5pm-7pmThe Viceroy Hotel ResortSnowmass, Colorado
Women in Construction Leadership Boot Camp October 28-31, 2015 The Nature PlaceFlorissant, Colorado
Annual Design-Build Conference & EXPONovember 2-4, 2015Colorado Convention CenterDenver, CO
Energy Land Management Certificate SeriesUpcoming Classes
• Energy Finance & Management (E,F &M) Certificate classes begin August 16, 2015
• Mineral, Royalty & Surface Owners (MRSO) Certificate classes begin September 26, 2015
• Advanced Mineral, Royalty & Surface Owners (Adv MRSO) Certificate classes begin October 23, 2015
• Leases, Titles & Contracts (LTC) Certificate classes begin November 7, 2015
For ELM information visit daniels.du.edu/burns or call Debra Ortlip at 303.871.3997
For more information about any events or programs, contact the Burns School303.871.3432 or [email protected]
FALL 2015
BURNS REV I EWDANIELS COLLEGE OF BUSINESS UNIVERSITY OF DENVER
FRANKLIN L. BURNS SCHOOL OF REAL ESTATE AND CONSTRUCTION MANAGEMENT
Calendar of Events
Reaching Out & Making a DifferenceA Letter from Director Dr. Barbara Jackson
The Franklin L. Burns School of Real Estate and Construction Management is stepping up its outreach to the RE-CM industry overall and the Denver Community. One of the benefits of being a University located in the middle of a major metropolitan area is that we can be a resource to the various interests throughout the city, as well as the industry as a whole. The benefits to the community is that they have access to a variety of expertise that otherwise may be beyond their reach. Here is a list of just a few of our most recent engagements.
• We have conducted a series of workshops for Denver’s REDI Program - Real Estate Diversity Initiative. Dr. Jeff Engelstad created an “Income Property Finance and Pro-forma Modeling Class” for REDI participants. REDI was established in 2009, when ULI Colorado and Denver’s Office of Economic Development came together in an effort to mentor minorities and women interested in learning more about real estate and real estate development. Now in its sixth year, ULI Colorado’s Real Estate Diversity Initiative (REDI) has reached more than 171 mentorees. We are honored to be contributing to this program.
• In partnership with FMI, the Burns School recently completed hosting and facilitating our first Women in Construction Leadership Boot Camp. This unique 3 ½ day event was available to women from across the United States and attracted 11 women from nine different companies, and five different states. Because of its success, additional boot camps have been scheduled. (See article on next page)
• In conjunction with the Design-Build Institute of America, we hosted a Design-Build Educator’s Workshop on campus in August. Faculty members from 15 different Universities came to campus for a week to learn how to embed more design-build education into their educational programs. Faculty members received grants from the Charles Pankow Foundation to attend. With its new MS degree and its fully online Executive Masters program in Integrated Project Delivery, DU has become the go-to place for advanced integrated construction education, so it is no wonder that other University faculty would like to learn more about it.
These are examples of just a few of the partnerships and associations that we are expanding. On all fronts – Real Estate, Property Development, and Project Delivery, the Franklin L. Burns School is committed to excellence in education and active industry and community outreach. We look forward to even more partnerships and outreach opportunities in the future. Be on the look-out for more activities to come over the next 6-12 months.
Please contact Marie Kline – Director of External Relations at 303.871.7459 or [email protected] if you would like to discuss an outreach engagement or inquire about our upcoming activities.
Sincerely,
Barbara (Barb) J. JacksonDirector, Franklin L. Burns School of Real Estate and Construction ManagementDaniels College of Business, University of Denver
Bachelor of Science in Real Estate & the Built Environment: Wesley Berg, Samuel Blinderman, Karl Boasson, Campbell Clarey, Lauren Conrad, Robert Denton, Malcolm Griffin, John Hardesty, Ryan Huning, Mackenzie Nelson, Reyes Rascon, Aaron Romanowski, Matthew Shallcross, Michael Toth
MBA with Real Estate Concentration: Samuel Breck, Jeffrey Keeley, Matthew Vernon
Master of Science in Real Estate & the Built Environment: Shawn Akin, Perry Bacalis, Adelicia Colmenero, Zachary Cornell, Daniel Greenberg, Karolette Greene, Nicholas Hays, He Huang, Xiao Huang, Harry Jenkins, Adam Katz, Stefan Kelley, Jerad Larkin, Joseph Larkin, Chenyang Li, Dunjin Lin, Yixuan Liu, Kristen Matthews, Matthew Poss, Spencer Rands, Aaron Rieger, John Schink, Valay Shah, Kenneth Stanberry, Ann Sumrall, Deborah Vanhoosen, Rebecca Wiener, Hongchao Yang
Congratulations!
Burns School 2015 Spring & Summer Graduates
Page 12AA — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
Page 14AA — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
Calendarn ABC – Associated Builders
and Contractors – Rocky Moun-tain Chapter will host its Excel-lence in Construction Awards Oct. 16.
The event celebrates ABC members in one of the construc-tion industry’s premier awards ceremonies. This year’s theme is “Back to EIC’s Future” and will celebrate ABC’s 40th anniversary.
The awards ceremony kicks off at 6 p.m. with its Past President’s Cocktail Reception, which is open to all members. Dinner and awards immediately follow at 7 p.m. Attire for the event is from any of the “Back to the Future” movie eras: Wild West, 1955, 1985 or 2015.
It is being held at the Four Sea-sons Hotel Denver at 1111 14th St. in Denver.
For more information, visit www.abcrmc.org.
n BOMA – Denver Metro
Building Owners and Man-agers Association will hold its membership meeting Sept. 9. A new member orientation will be held from 11 to 11:30 a.m. with the program and lunch from 11:30 a.m. to 1 p.m. at the Wellshire Event Center, 3333 S. Colorado Blvd. in Denver.
For more information, visit www.bomadenver.org.
n CREJ – Colorado Real Estate
Journal, with Otten Johnson Robinson Neff + Ragonetti PC and in association with DTZ, will present Colorado’s largest land and development conference.
The 2015 Land & Develop-ment Conference & Expo will be held at the Inverness Hotel & Conference Center, 200 Inverness Drive West, Englewood, Sept. 1. In addition to a broker panel and market update, the conference will include metro Denver and Northern Colorado Interstate
25 panels as well as a panel on Denver and Northern Colorado infrastructure.
Also, CREJ and Holland & Hart LLP will present the 2015 Office Summit at the Inverness Hotel & Conference Center Oct. 1. The event will cover corporate real estate, development, invest-ment and a 2016 market forecast.
For more information, visit www.crej.com.
n CREW – Commercial Real
Estate Women Denver will host a panel discussion, “The Renais-sance of Glendale 180,” Sept. 18.
The event, at The Curtis Hotel, 1405 Curtis St., will feature a panel discussion from experts working on the project, a history of the project and what to expect from the new entertainment dis-trict.
For more information, visit www.crewdenver.org.s
For a complete 12-month calendar
of association events, please visit our website at www.crej.com and click on Community
Calendar.
For contact information, association profiles, and links, please visit www.crej.com and click on Industry Directory.
American Council of Engineering Companies/Colorado
American Institute of Architects Colorado
American Society of Interior Designers
American Society of Landscape Architects, Colorado Chapter
American Subcontractors Association
Apartment Association of Metro Denver
Appraisal Institute
Associated Builders & Contractors
Associated General Contractors
Building Operators Association of Colorado
Building Owners & Managers Association, Denver
Building Owners & Managers Association, Pikes Peak
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 17AA
Breakfast & Panel Discussion with National Site Selectors
PRESENTEDBY
Friday, September 18, 2015Seawell Grand Ballroom, Denver Performing Arts Complex – 1101 13th StreetRegistration: 7 to 7:30 a.m. – Breakfast and Program: 7:30 to 9 a.m.
Page 20AA — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
WinCompsAdams County
Property Location: 8901 Grant St., Thorn-ton, "Montair Apartments"Property Description: 319-unit, three-sto-ry apartment complex with 317,410 sf net rentable area, with 19 buildings plus 1,639 sf rental office, YOC 1984, brickLand Size: 13.51 acresSales Price: $48.95M, or $153,448 per door, or $154.22 per sfClosing Date: 7/20Reception No.: 2015000058820Grantor: Holland Holdings III Peppercorn LLC, Clyde P. Holland Jr., CEO, 360-694-7888, or Erik Hagevik, Denver partner, 720-452-3037Grantee: Montair Thornton LP, c/o Star-wood Capital Group Global LP, Chris-topher D. Graham, 202-470-1550, or [email protected], senior managing director, 591 W. Putman Ave., Greenwich CT 06830Financing: $39.2M, due 8/1/25, payable to Berkeley Point Capital LLCComments: Part of portfolio sale that included 15403 E. First Ave., 100 Idalia Ct. and 358 Potomac Way, Aurora. Montair includes 353 units @ $132,861 per door, or $169.49 per sf. There are 528 open parking spaces with the average-size unit @ 995 sf and an average rental rate of $1.23 per sf, or $1,222 per month. There is one studio @ 550 sf, 67 one-bedroom units @ 750 sf, 36 one-bedrooms plus loft @ 850 sf, 139 two-bedroom/two-bath units @ 1,050 sf & 76 two-bedroom/two-bath units with loft @ 1,185 sf. David Martin & Pamela Koster of Moran & Co. handled the sale.
Property Location: Vic. SWC E. 144th Ave. & Holly St., ThorntonProperty Description: Vacant landLand Size: 109 vacant lots Sales Price: $4.36M, or $40,000 per lotClosing Date: 7/16Reception No.: 2015000057054Grantor: Lennar Colorado LLC, Russell Crandall, VPGrantee: Meritage Homes of Colorado Inc., 720-482-0202Comments: Lewis Pointe, First Amend-ment. Mike Salmina is director of acquisi-tions, 303-406-4344.
Property Location: 6691 Colorado Blvd., Commerce CityProperty Description: 22,414-sf industrial building, YOC 1999, metal const.Land Size: 2.63 acresSales Price: $2.95M, or $131.61 per sf Closing Date: 7/16Reception No.: 2015000057749Grantor: GEP Investments Inc., George Eidsness, pres.Grantee: Cross Development CC Com-merce City LLC, c/o Steve Rumsey, pres. of Cross Development, Carrollton TX, 214-614-8252 Comments: Buyer is a developer from Carrollton TX providing construction and due diligence work for single-tenant and restaurant properties. Buyer will locate their construction company at this loca-tion.
Property Location: 5720 Holly St., Com-merce CityProperty Description: 53,500-sf ware-house, metal w/masonry façade, YOC 1984 Land Size: 2.92 acresSales Price: $2.6M, or $48.60 per sf Closing Date: 7/23Reception No.: 2015000057011Grantor: Gannett Peak Investors LLC, Thomas & Ann Fries, mgrs.Grantee: SS Land Holdings 3 Holly LLC, Steve Gittelman, mgr., 303-459-7636Comments: Property was listed and sold by Ringsby Realty Corp., Alex Ringsby, SIOR, 303-892-0210, & Scott Patterson, 303-892-0121. Lease rate was quoted at $4.95 per sf, with $1.10 per sf expenses.
Arapahoe CountyProperty Location: 1) 1150 S. Cherry St., Denver, “Four Mile Apts.”; 2) 4390 E. Mis-
sissippi Ave., Glendale, “The Birch Apts.”; 3) 1045 S. Birch St., Glendale “Park Point Apts.”; 4) 1250 S. Clermont St., Denver, “Infinity Flats”; 5) 1105 S. Cherry St., “Van-tage Point Apts.,” Denver & GlendaleProperty Description: 1) 116-unit, three-story apartment complex with 103,165 sf, YOC 1981, brick construction, 164 parking spaces, with balconies; 2) 129-unit four-sto-ry apartment, four buildings with 83,350 rentable sf, YOC 1964, brick construction, with 155 parking spaces; 3) 61-unit, three-story apartment building, 47,875 rentable sf, YOC 1965, brick construction, with 85 parking spaces; 4) 116-unit, three-story apartment, five buildings, 103,550 sf, YOC 1979, brick/frame construction, with 180 parking spaces; 5) 115-unit, three-story apartment building, 92,000 sf, YOC 1975, vinyl & brick construction, w/24 carports & 160 parking spaces. Total of 537 units containing 429,940 sf net rentable area, YOC 1964-1981Land Size: 15.04 acres (five properties)Sales Price: $69.5M, or $129,423 per unit, or $161.65 per sfClosing Date: 7/14Reception No.: D5077278Grantor: WCB LLC, c/o Blueline Equity Partners LLC, Stephan James Daniel, mgr., 303-759-1500Grantee: 1150 South Cherry Street (Four Mile) LLC, c/o Arel Capital LP, 540 Madi-son Ave., 26th Floor, NYC, NY 10022, Rich-ard G. Leibovitch, mgr.Financing: $48.1M blanket mortgage, due 10/13/15, payable to Capital One, NA Comments: The properties were listed and sold in a five-building portfolio in both Denver and Arapahoe counties by ARA Newmark, Terrance Hunt, Justin Hunt, Andy Hellman, Shane Ozment & Anna Stevens. For individual sales infor-mation on these apartment comps, call John V. Winslow, CRE, @ 720-612-7878.
Property Location: 358 Potomac St., Auro-ra, “Canterra at Fitzsimons Apts.”Property Description: 188-unit, two-story apartment complex, with 147,471 sf net rentable area, YOC 1985, brick construc-tion, 12 buildingsLand Size: 7.43 acresSales Price: $23.45M, or $124,734 per door or $158.28 per sf Closing Date: 7/16Reception No.: D5079952Grantor: Holland Holdings III Autumn Creek LLC, c/o HH III REIT Inc., Clyde P. Holland Jr., CEO, 360-694-7888, or Erik Hagevik, Denver partnerGrantee: Canterra Aurora LP, c/o Star-wood Capital Group Global LP, Chris-topher D. Graham, 202-470-1550, or [email protected], senior managing director, 591 W. Putman Ave., Greenwich CT 06830Financing: $18.81M, due 8/1/25, payable to Berkeley Point Capital LLC Comments: This building contains 148,152 sf gross building area with 12 buildings, plus 1,388-sf rental office, as per assessor’s office. There are 48 one-bedroom units @ 592-604 sf, 46 one-bedroom units @ 668-698 sf, 46 two-bedroom/two-bath units @ 900-917 sf, 48 two-bedroom/two-bath units @ 924-956 sf. There are 102 carports and 234 open spaces. David Martin & Pamela Koster of Moran & Co. handled the sale, which also included 358 Potomac, Canterra @ Fitzsimons, Aurora; 15403 E. First Ave. and 100 Idalia Ct., Aurora “Sil-verbrook Apts.” & 8901 Grant St., “Mon-tair Apartment Homes,” Thornton. The entire portfolio sold for $94.95M with 672 units, or $141,295 per unit & $154.49 per sf.
Property Location: 15403 E. First Ave., 100 Idalia Ct., Aurora, “Silverbrook Apts.”Property Description: 165-unit, three-sto-ry apartment complex with 12 buildings, 149,740 sf rentable area, plus 2,475-sf rental office, YOC 1985, wood constructionLand Size: 7.13 acres (two separate tracts)Sales Price: $23.45M, or $142,121 per door, or $182.240 per sfClosing Date: 7/16Reception No.: D5079935Grantor: Tollgate Creek Apartments (CO-212), c/o Holland Holdings III Autumn
Creek LLC, c/o HH III REIT Inc., Clyde P. Holland Jr., CEO, 360-694-7888, or Erik Hagevik, Denver partnerGrantee: Silverbrook Aurora LP, c/o Star-wood Capital Group Global LP, Chris-topher D. Graham, 202-470-1550 or [email protected], senior managing director, 591 W. Putman Ave., Greenwich CT 06830Financing: $18.81M, due 8/1/25, payable to Berkeley Point Capital LLCComments: Sold for $12.95M in June 2008. There are 300 open parking spaces and the unit mix is as follows: 39 one-bedroom units @ 722 sf, 19 one-bedrooms with lofts @ 829 sf, 71 two-bedrooms/two-bath units @ 945 sf, 36 two-bedroom/two-bath units with loft @ 1,076 sf. The average size unit is 908, with an average rent of $1,203 per month, or $1.33 per sf. David Martin & Pamela Koster of Moran & Co. handled the sale, which was part of a portfolio that included 358 Potomac, "Canterra @ Fitzsimons," Aurora; 15403 E. First Ave. and 100 Idalia Ct., Aurora, “Silverbrook Apts.” & 8901 Grant St., “Montair Apart-ment Homes,” Thornton. The entire port-folio sold for $94.95M with 672 units, or $141,295 per unit & $154.49 per sf.
Property Location: 5500 S. Quebec St., Greenwood Village, “CoBank Center”Property Description: 204,945-sf, four-story office building, YOC 1984, reinforced concrete frame with aggregate siding.Land Size: 8.23 acresSales Price: $16.15M, or $78.80 per sfClosing Date: 7/23Reception No.: D5081180Grantor: Wells Fargo Bank, NA, Trustee for Morgan Stanley Capital I Inc., c/o C-III Capital Asset Management LLC, R. Brian Watson, mgr., www.northstarcp.comGrantee: 5500 South Quebec LLC, 1999 Broadway, Suite 770, Denver CO 80202Financing: $11.53M payable to Calmwater Real Estate Credit Fund II, LP Los Angeles CA 90025, due Aug. 1, 2017, attn: Larry Grantham (71.4% LTV)Comments: See Public Trustee’s Deed No. 0029-2014 dated 9/12/14 regarding USA 5500 S. Quebec St LLC to Wells Fargo Bank, NA, Trustee for Morgan Stanley Capital I Inc., c/o C-III Capital Asset Man-agement LLC, with original sales price @ $30.5 million. CoBank will be vacating its 180,000 sf of office space in early 2016 and Waste Management is the other main tenant.
Property Location: 14050 E. Iowa Drive, Aurora “Carson Apartment Homes”Property Description: 201-unit two-sto-ry-plus-garden-level apartment complex, with 145,260 sf, including 8 buildings, plus 2,139-sf rental office, YOC 1972, brick Land Size: 15.73 acresSales Price: $18.05M, or $89,801 per door, or $124.26 per sf Closing Date: 7/16Reception No.: D5077923Grantor: Florida Blackhawk LLC by: BMC Investment Co., Matthew JoblonGrantee: Latitude Carson Aurora LLC, mgr., 350 South Beverly Dr., Ste. 300, Bev-erly Hills, CA 90212, c/o Latitude Real Estate Investors, Glenn A. Sonnenberg, president, 310-234-2101 or [email protected] or http://lmrei.comFinancing: $4.06M payable to Centerline Mortgage Capital Inc.Comments: Property sold for $10.2M in July 2012. Jeff Hawks, Doug Andrews, Anna Stevens & Terrance Hunt of ARA Newmark brokered the deal. The Arapa-hoe County Assessor’s Office indicates there is 167,166 sf gross building area with 8 buildings, plus a 2,139-sf rental office. The average rental rate is $876 per unit, or $1.21 per sf. The average size is 723 sf per unit. There are 400 open parking spaces. Electric is individually metered while the gas and water is master metered and paid by the resident. There are 92 one-bedroom units with 560 sf, rental rate was $781/mo; 109 two-bedroom/one-bath units @ 860 sf. Rental rate was $965 per month.
Property Location: Vic. southwest side of Smoky Hill Rd., approx. 500’ southeast of
E-470, Aurora Property Description: Vacant commercial land Land Size: 43,976 sfSales Price: $994,250, or $22.61 per sf Closing Date: 7/16Reception No.: D5078194Grantor: Forest Trace Development Inc., Richard A. Frank, pres.Grantee: Smoky Hill Crossing LLC, Gary Fullington, mgr., 214-343-9400Financing: $1.42M payable to JPMorgan Chase Bank, NA, due 8/1/45Comments: The buyer is The Dimension Group, with Chad Wheeler in the Denver office, 720-536-3180. Buyer will facilitate a build-to-suit for 7-Eleven store with gaso-line pumps on this site.
Boulder CountyProperty Location: 2121 Canyon Blvd., Boulder, “Canyon Villa Apartments”Property Description: 60-unit, four-story apt. building w/49,140 sf, YOC 1968Land Size: 54,929 sfSales Price: $9.71M, or $161,835 per unit or $197.60 per sfClosing Date: 7/17Reception No.: 03461114Grantor: Villa Partnership, by Roberts B. Poston Sr. Family Partnership, Pamela E. Lillard, GPGrantee: 2121 Canyon LLC (59.84%), c/o Chris Jacobs & Scott A. Holton of Element Properties, 303-551-0616, & MC King Fam-ily LLC (19.42%), 3434 47th St., 220, c/o Miles King, CCIM, 303-888-5411Financing: $10.15M payable to FirstBankComments: 3 studios @ $1,000/mo., 41 one-bedroom units @ $1,200/mo. and 16 two-bedroom units @ $1,500/mo. This is a value-add property and buyer will spend approximately $2 million for renovation.
Property Location: 2446 N. Main St., Longmont, “Super 8 Motel”Property Description: 64-room, two-story motel with 21,787 sf, brick & stucco con-struction, YOC 1989Land Size: 1.32 acresSales Price: $4.7M, or $73,438 per room, or $215.73 per sf Closing Date: 7/16Reception No.: 03461075Grantor: Choi’s Hospitality Inc. (Hyun Y. Choi, pres.)Grantee: SFL LLC, c/o WKS Restaurant, Roland Spongberg, CEO, 562-425-1402Comments: Southeast corner of Main St. & Ute Highway
Property Location: 1750 14th St., Boulder Property Description: Vacant commercial landLand Size: 32,248 sfSales Price: $2.01M, or $62.46 per sf Closing Date: 7/17Reception No.: 03461141Grantor: 14th Street Element LLC, Chris Jacobs, mgr., 303-551-0616Grantee: MUFC LLC, Hansen Rada & Brian Biffle, mgrs. Financing: $1.2M payable to Collegiate Peaks BankComments: There are plans for a 69,541-sf mixed-use building containing 41 apart-ment units in 20,881 sf & three floors of commercial and office space.
Property Location: 3216 Arapahoe Ave., Boulder, “Howe Building”Property Description: 8,200-sf single-sto-ry strip center, YOC 1957, brick const. Land Size: 26,049 sfSales Price: $1.6M, or $195.12 per sf Closing Date: 7/15Reception No.: 03461152Grantor: Howe Building LLC, Lura L. Zacharisen & Kathy MandsagerGrantee: Abboud Properties LLC, Dr. Danny Abboud, DDS, 303-442-5000Financing: $1.28M payable to First West-ern BankComments: This property was listed and sold by Todd Walsh, CCIM, of Colorado Group Inc., 303-444-5040.
The Winslow Report
Please see Next Page
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 21AA
Denver CountyProperty Location: 2767 Wewatta Way, Denver, “The Marq at Rino”Property Description: 301-unit, five-story apartment community, 252,930 sf, YOC 2011, brick/stucco/frame construction, 435 parking spaces in garage Land Size: 3.04 acresSales Price: $72.5M, or $240,864 per door, or $286.64 per sf Closing Date: 7/12Reception No.: 2015079181Grantor: Denargo Market MF-1 LP, Cypress Real Estate Advisors, M. Timothy Clark, pres., 512-494-8510Grantee: HLLC CWS Rino LP, c/o CWS Apartment Homes LLC, 512-250-1300, attn: Mary Ellen Barlow, VP, Newport Beach CA office, 800-466-0020Financing: $54.38M payable to CBRE Mul-tifamily Capital Inc.Comments: Listed and sold by ARA New-mark, Doug Andrews, Jeff Hawks, Ter-rance Hunt, Shane Ozment & Anna Ste-vens, 303-260-4400. There are 52 studios ranging from 504 sf to 685 sf renting for $1.91 to $2.36 per sf. There are 158 one-bedroom units ranging from 700 sf to 866 sf, renting for $1.87 to $2 per sf. There are 91 two-bedroom/two-bath units @ 910 sf to 1,448 sf renting for $1.79 to $1.97 per sf. The average size is 840 sf per unit. Rents are $1,579, or $1.88 per sf. The expenses are estimated to be $5,127 per unit not includ-ing reserves. [email protected]
Property Location: 1000 S. Broadway, “1000 South Broadway Apartments,” DenverProperty Description: 260-unit, four-story apartment community, 240,311 sf, YOC 2014, 384 parking spaces via structured parking garage, LEED Gold designed, units average 924 sfLand Size: 3.1 acresSales Price: $64.6M, or $248,462 per door, or $169.63 per sf Closing Date: 7/14Reception No.: 2015097621Grantor: Broadway Denver LLC, Jona-than Fore, mgr., 1741 Village Center Cir., Las Vegas NV 89134, c/o Fore Property Co., 720-562-6050Grantee: GS Broadway LLC, c/o Grey-star, A. Johsua Carper, VP, Wes Fuller, managing director, 843-579-9400Financing: $41M , due 7/15/2015, payable to JPMorgan Chase Bank Comments: The properties were listed and sold by David Martin & Pamela Koster at Moran & Co., 720-932-8148. There are 3 studios @ 651 sf, 142 one-bedroom units @ 756 sf, 111 two-bedroom/two-baths @ 1,128 sf, four three-bedroom/two-bath units @ 1,467 sf. The average rental rate is $1,688/mo., or $1.83 per sf.
Property Location: 833 Dexter St., Denver “The Gloria Apartments”Property Description: 20-unit, three-story walk-up apartment, 15,000 sf, YOC 1963, brick construction.Land Size: 12,700 sfSales Price: $2.83M, or $188,667 per unit, or $188.67 per sf Closing Date: 7/13Reception No.: 2015098936Grantor: THFWest1 LLC, Jon R. Staen-berg, mgr.Grantee: Bear’s Fortress LLC, Ryan D. Geiser, mgr., 303-778-5472Financing: $1.42M payable to JPMorgan Chase Bank, NA, due 8/1/45Comments: Property was listed by Russ Wehner, CRE, of Russ Wehner Realty. The buyer was represented by Kevin Calame and Matt Lewallen of Pinnacle Real Estate Advisors LLC. There are nine one-bed-room units, nine two-bedroom units and two studios. Property sold on a 3% cap rate on existing expenses and income at time of sale. Buyer is in process of increas-ing the rents significantly.
Land Size: 28,159 sf, zoned I-MX-3Sales Price: $1.92M, or $68.01 per sf Closing Date: 7/17Reception No.: 2015099008Grantor: Richard O’Dell, 940 Pearl, Den-ver COGrantee: Littleton Capital Partners LLC, Jonathan Bush, mgr., 303-797-9119Financing: $1.34M payable to Kirkpatrick Bank, Colorado SpringsComments: [email protected] or Mark R. Best, [email protected]
Property Location: 4329-4395 & 4377-4411 W. Nevada Place, Denver Property Description: 20-unit single-story apt. buildings, 12,072 sf, YOC 1956, brick construction, 6,036 sf in each 10-unit build-ing. Land Size: 49,186 sfSales Price: $1.6M, or $80,000 per door, or $132.54 per sf Closing Date: 7/31Reception No.: 2015106592Grantor: Alameda West LLC, Thanh Hoang & Nina T. Tran, mgrs.Grantee: Nevutica LLC, James F. King, mgr.Financing: $892,500 payable to First National Bank, ArapahoeComments: Buyer plans to spend approx-imately $10,000 per door in renovation. This building contains all two-bedroom units. Property is in average condition and the extent of the unit renovation will determine its cap rate. Josh Newell of Pin-nacle Real Estate Advisors was the buyer’s representative on the transaction. Existing rental rate is approximately $625/mo.
Property Location: 4439 W. Nevada Place, Denver Property Description: Nine-unit, single-story apartment, 4,970 sf, YOC 1956, brickLand Size: 12,500 sfSales Price: $1.19M, or $132,222 per unit, or $239.44 per sf Closing Date: 7/17Reception No.: 2015098990Grantor: Nevutica LLC, James F. King, mgr.Grantee: Nevada Courtyard Apartments LLC, by Blue Spruce Equity LLC, Christo-pher P. Campbell, mgr. Financing: $892,500 payable to First National Bank, ArapahoeComments: Building has been completely renovated by the seller and rents were increased to $1,250 per month. This build-ing contains all two-bedroom units. The buyer is a lawyer who has his own com-pany, Blue Spruce Equity, 303-915-8350, [email protected]. The transaction was negotiated by Josh New-ell & Matt Ritter of Pinnacle Real Estate Advisors. Property sold on an 8% cap rate based on estimated 5% vacancy.
Property Location: E/S Tower Rd., north of E. 68th Ave., 6792 Tower Rd., DenverProperty Description: Vacant hotel site, zoned C-MU-20 Land Size: 89,875 sfSales Price: $1M, or $11.13 per sf, or $9,091 per roomClosing Date: 7/29Reception No.: 2015105544Grantor: LNR CPI High Point LLC, Ricard Kern, VP, 303-218-9500Grantee: DIA Tower Road LLC, Kausnik N. Naik, pres., c/o Baywood Hotels TexasFinancing: $8.84M payable to Centennial Bank (construction loan)Comments: Buyer is based in San Anto-nio TX, 210-340-9991. Cushman & Wake-field's Steve Hager, 303-813-6446, was list-ing broker. Plan to build 110-room hotel.
Property Location: 2628 Walnut St., Den-ver Property Description: 3,118-sf office build-ing, renovated in 2011, brick construction, YOC 1945; two offices, conference room, kitchen, open areaLand Size: 3,150 sfSales Price: $885,000, or $283.84 per sf Closing Date: 7/30Reception No.: 2015105800Grantor: Smart Development Group LLC, Jerod Raisch, mgr.
Grantee: Associative Property LLC, Josh-ua Elson, mbr.Financing: $877,400, due 7/29/40, SBA loan payable to Wells Fargo, NAComments: Equity Commercial Real Estate's Tom Monks negotiated the deal.
Property Location: 1941-1961 W. Evans Ave., Denver Property Description: 6,033-sf, two-tenant retail building, fluted block construction, YOC 1984 Land Size: 12,627 sfSales Price: $597,000, or $98.96 per sf Closing Date: 8/3Reception No.: 2015108738Grantor: MJG Quincy LLC, Hal Naiman, mgr.Grantee: Eagle Opportunities LLC, John Homburger, mgr.Comments: Property was listed and sold by Hal Naiman of the Sherman Agency Inc., 720-475-5002, & Brian Frank, 720-475-5004. Property was leased to Labor Ready as of 4/30/15 and Reality Strikes Studio as of 5/31/2015 as per listing bro-ker’s brochure. Expenses in 2014 were approximately $3.10 per sf and lease rate was $7.69 per sf. Based on prior rent roll, property sold on 7.8% cap rate.
Property Location: NWC Lincoln St. & E. 18th Ave., SEC E. 19th Ave. & Broadway, 1811 Lincoln St., 1820 & 1830 Broadway, DenverProperty Description: Parking lotLand Size: 98,700 sfSales Price: $14M, or $141.84 per sfClosing Date: 8/3Reception No.: 2015101510Grantor: Trinity (Denver) PIP LLC, c/o Avanti Land Group, 923 N. Pennsylvania Ave., Winter Park, FL 32789-2456Grantee: Emily Griffith FoundationFinancing: $6.17M payable to Citywide Banks
Property Location: 3540 E. 31st Ave., Den-verProperty Description: 20,127-sf YMCA building, YOC 1974, & 7,350-sf recreation building, YOC 1956, masonry construction (land value)Land Size: 4.25 acresSales Price: $3.65M, or $19.71 per sf Closing Date: 8/3Reception No.: 2015109190Grantor: Blue Rhino Investments Inc., Stephen Caragol, pres.Grantee: Skyland Village LLC, Patrick Guinness, mgr., 720-231-1361Financing: $6.05M payable to First Nation-al Bank Comments: Planned for 60 townhomes on the remaining site, which contains 2.72 acres. Guinness re-sold 66,625 sf of land on the southern portion of the original site containing 4.25 acres for $2.64M, or $36.92 per sf. Transaction handled by Tran-swestern's Tom Wanberg, 303-952-5592, and Stacy Brady, 303-952-5604.
Douglas CountyProperty Location: 8530 Concord Center Dr., EnglewoodProperty Description: 54,280-sf ware-house, YOC 2006, concrete tilt-up Land Size: 3.76 acresSales Price: $5.21M, or $96.05 per sf Closing Date: 7/13Reception No.: 2015050693Grantor: David Shteremberg, trustee, José Zyman, trustee, San Diego CAGrantee: Concord CAS LLC, Cary St. Onge, mgr., 303-927-8489Financing: $3.9M due 7/15/2025, payable to FirstBankComments: Tenant is Case AV, Michael Scherr, pres., 303-768-9070. Buyer is Boul-der Real Estate agent. Listing information reflects Suites 300 & 400 were for lease at $12.40 per sf. Listing brokers were Tyler Reed of JLL, 303-260-6515, & Peter Beugg, 303-217-7974.
construction, for a total 20,171 sfLand Size: 1.77 acresSales Price: $2.25M, or $111.55 per sf Closing Date: 7/15Reception No.: 2015050081Grantor: Lawawo Enterprises LLC, Del-bert L Woodward, mgr.Grantee: Sellers Creek LLC, Dale O. Coyk-endall, mgr., 303-799-1770Comments: Brett Ogden, 719-237-1714, & Todd Ogden, 303-351-2217, of Hoff & Leigh were involved in the sale of this property. There is 4,000 sf available in the office building @ $16 per sf full service, while the industrial building contains a day care center and church. There are 99 parking spaces.
Property Location: W/S S. Oswego St., 250’ South of E. Lincoln Ave., EnglewoodProperty Description: Vacant medical site Land Size: 2.12 acresSales Price: $2.13M, or $23 per sf Closing Date: 7/23Reception No.: 2015051243Grantor: Shea Colorado LLC, Peter A. Culshaw, 303-773-1700 Grantee: Portercare Adventist Health Care, Kris Ordelheide, Esq., 303-804-8103, [email protected], & Dan Enderson, treasurerComments: Site adjoins office building purchased by Portercare for $2.4 million in September 2014. This site is directly south of 9949 S. Oswego St., which contains an 11,848-sf medical building (former bank converted to medical building) on 1.32 acres. This site may be used for future expansion for the buyer.
Property Location: 880 Kinner St., Castle Rock “Burger King” Property Description: 3,066-sf fast-food restaurant, YOC 1981, masonry const. Land Size: 31,712 sfSales Price: $1.68M, or $548.37 per sf Closing Date: 7/21Reception No.: 2015051243Grantor: Kim MP Multi State LLC, Barba-ra E. Briamonte, mgr., c/o Kimco Realty, Hyde Park NY, 516-869-9000 Grantee: Realty Income Properties 19 LLC, Shannon Jensen, VP, senior legal counsel & manages acquisitions teamComments: Investment
Property Location: 9843 Titan Ct., Little-ton Property Description: 12,000-sf ware-house, including 1,500-sf office area, full-sized paint booth & mixing room, sprin-kled, three 10’x12’ drive-in doors and two 16’10’ doors, with fenced yard and 1,200-sf storage building; 3,066-sf fast-food res-taurant, YOC 1981; and 4,600-sf building with four 12’x14’ drive-in doors, (currently used by a church youth group), total of 17,800 sfLand Size: 2.19 acresSales Price: $1.29M, or $126.97 per sf Closing Date: 7/31Reception No.: 2015054602Grantor: Shawn Marin Grantee: Gault Capital Partners LLC, Gregg A. Spieker, mgr., 303-996-0048Financing: $975,000 payable to First-Citi-zens Bank & Trust, Raleigh NCComments: Buyer purchased building for potential expansion and/or storage for his business, Advanced Exercise Equipment. Listing brokers were Greg Knott and Brad Gilpin of Unique Properties LLC.
The Winslow ReportContinued from Previous Page
John V. Winslow, CRE, is president of Win-Comps LLC and has more than 40 years’
experience in commercial real estate. He can be reached at 720-612-7878 or [email protected]. The information was gathered from county records and deemed to be reliable. Other sources of research include bro-chures and information verified by owners or list-ing/selling brokers.John V. Winslow,
CRE
Page 22AA — COLORADO REAL ESTATE JOURNAL — August 19-September 1, 2015
c l a r i t yYou’ve met them. The ‘wise men’ who use big, fifty-cent words to impress you with their ‘knowledge’ (so-called). A REAL wise man once said, unclear communi-cation is the result of unclear thinking. We at the 1031 Experts’ llc agree. We LOVE to see our client’s ‘light go on.’ We take difficult 1031 concepts and make them easy for people to understand. We make the compli-cated simple.
We don’t have to do this; we want to.
Call us!We want to be your 1031 Qualified Intermediary.
N a t i o n w i d e , t o l l - f r e e :
8 6 6 . 6 9 4 . 0 2 0 4w w w . e x p e r t 1 0 3 1 . c o m
crej071515-1031experts.indd 1 6/30/15 8:47 PM
August 19-September 1, 2015 — COLORADO REAL ESTATE JOURNAL — Page 23AA
PROPERTY AVAILABLEFor Sale For Lease Wanted
office • industrial • retail • multifamily • land • medical office • hospitality • restaurants • senior housing & care
CREJ’S TOOLS & RESOURCESLog on to CREJ’s website for the most comprehensive set of commercial real estate resources in Colorado.
f Search the Industry Directory for lenders, brokers, property managers, architects, contractors and more. Over 1,000 entries with firm profiles, contact names, phone numbers and email addresses!
f Research Projects Under Construction & Planned and stay current on which projects are underway, and the companies building them.
f Use our Sales & Mortgage tool to see who’s buying, selling and lending for properties over $500,000 in 13 Colorado counties. Loan transactions include the names of the borrower and lender, plus the property address, loan type and closing date for each mortgage. Sale transactions include the names of the seller, buyer, address and purchase price and closing dates.
f Search Property Listings for billions of dollars worth of available properties for sale or lease. Sort property results by city, county, zip code, property name, rates, lot size, and space available.
f Research Market Statistics by geographic region including rental & vacancy rates, absorption, etc. Find links to the most recent, comprehensive commercial real estate market statistics and forecasts.
f Find Financing according to property type, location, loan size & loan type. Our financing tool lets you find lenders that match your search criteria.
f Use our Loan & Investment Calculators to determine monthly and annual mortgage payments based on loan amount, interest rate, amortization period and term, or determine how much you can afford to invest in a property.
heating up in Colorado. Each facility is working hard for position in this market, much like the hard work that is taking place inside of the gyms. It has been hard to miss the facilities opening up in retail centers all over the Denver metro area. The influx of specialty fitness or studio concepts is spreading, and bigger, established facilities are paying attention.
“We have taken notice of what some of the studio concepts are
doing,” said Ed Williams, president and CEO of Wellbridge, which owns Colorado Athletic Club. “The compe-tition encourages Colorado Athletic Club to be better and improve class offerings. It’s a good competition that helps all brands in the industry.”
Colorado Athletic Club has seven locations throughout the Front Range, and the eighth is on its way, in Lower Downtown at 1601 Wewatta St. The fitness centers range in size from 35,000 square feet to 120,000 sf, among the largest when compared with other fitness offerings in the
state. The new Colorado Athletic Club is the third facility in down-town, with one in the Tabor Center at 1201 16th St. and another at 1630 Welton St.
“Union Station is a hot area to be in,” said Williams. “I see some spe-cialty studio fitness open up in high-end retail spaces as well, and pay more rent just to be in the area.”
Even with all of the fitness facili-ties entering Colorado, the market is not oversaturated, said Jon Weisiger, senior vice president of retail ser-vices with CBRE. Similar to retail,
there are mergers, including 24 Hour Fitness’ acquisition of Denver Bally Total Fitness locations in December 2014, and clubs that are in different business cycles. Colorado Athletic Club and 24 Hour Fitness are mature concepts, while emerging facilities are trying to get a bigger slice of the pie.
“There is a lot of demand for fit-ness clubs, and they are trying to figure out their correct size and place in the market,” said Weisiger.
With new restaurants increasing in the area traditional retail remains important.
Retailer trends
PAGE 6
Parklets provide retailers with additional space in front of shops.
Landscape and design
PAGE 17
The mall might not be dead, just transitioning to a new space.
New shopping mall
PAGE 12
Please see Page 14
September 2015
Photo courtesy: WellbridgeColorado Athletic Club is opening a third downtown location to go along with its Tabor Center (above) and Welton Street facilities.
The myth about restaurant failure ratesShawn Sanborn
Bringing new life into your retail centerNicole Stone
Public space trends that benefit retailersJames Shaffer
EV stations can increase shopping center profitsJim Burness
What benefits do the lottery provide to retailers?Joel Messmer
4
6
8
10
12
14
16
17
17
18
20
Strong retail fundamentals continue in Colorado – posi-tive net absorption, declining vacancy rates and increased asking lease rates, along with
positive employment and popula-tion growth. Jason Schmidt from JLL
takes an in-depth look at these fun-damentals and market statistics on Page 4.
However, there are some concerns that go along with these fundamen-tals. The Denver retail vacancy rate
is the lowest it has been in a decade, according to CBRE, an indicator that supply and demand are unbalanced.
“To get back to an equilibrium, we have to create more new construc-tion,” said Daniel Miller, senior vice president, brokerage and retail ser-vices with CBRE. “There is a lot of demand for retail that is chasing few opportunities.”
The problem with creating more retail spaces is that construction costs are high. While the success-ful retail market will keep attracting new tenants, the state may reach a point when national retailers start reconsidering Denver as an ideal location because of limited supply and high construction costs.
Although, fitness centers seem to have no problem finding or building
new retail space, paying higher rents and thriving in Colorado. The com-petition between larger established fitness clubs and new smaller spe-cialized studios is heating up. Find out why fitness is booming in retail centers throughout Denver in the cover story.
Urban infill and transit-oriented projects are having more of an effect on the retail industry at existing and future rail stations. Find out what the challenges and opportunities are for these developments in Tim Gonerka’s article on Page 10.
Proper landscaping and adding par-klets to businesses and retail centers can have a big impact on whether or not customers visit and spend time at retailers. Nicole Stone and James Shaf-fer discuss these topics on Page 17.
Thank you to everyone who con-tributed articles, met for interviews and helped create a publication packed with information on the present state of Colorado’s retail real estate market. Without the help of these industry experts, this special section would not be possible.
As you read this publication, please contact me with thoughts about arti-cles and ideas for upcoming issues of Retail Properties Quarterly.
September 2015 — Retail Properties Quarterly — Page 3
EXPERIENCEA Peak is ComingLocated on the
northeast corner of Ken Pratt and
S. Hover Rd.
Village at the Peaks Brings Quality and Variety to Longmont25 Great Retailers, Restaurants and Services Announced to Date Dear Longmont
Community,As families get ready to
head back to school, we’re
getting ready to welcome
the community to our first
event at the new Village at
the Peaks: Our free Property
Preview and Back-to-School
Block Party this Saturday,
from 10 a.m. – 2 p.m.
As construction continues,
we’re excited to share our
progress and start having some
fun experiences at the new
Village at the Peaks, even before
we’re open.
Right now the project has
tremendous momentum –
Sam’s Club broke ground last
month, and Regal Cinemas,
Whole Foods , Wyatt’s Wine
& Spirits, Gold’s Gym and The
Sports Authority are readying
their stores for opening in a
few months. We continue to
announce new tenants, and
businesses tell us they can’t
wait to be part of the vibrant
Longmont community.
Everything is coming together
even better than we imagined.
We hope to see you at Village
at the Peaks this weekend for a
taste of what’s to come!
Best regards,
Allen GinsborgManaging Director &
Principal, NewMark Merrill
Mountain States
Allen Ginsborg
With the first set of store openings coming this fall, Village at the Peaks will be an exciting retail, dining and entertainment destination with many of the great names people in Longmont have said they want – including the #1 most requested attraction, a state-of-the-art new movie theater.
To date, Village at the Peaks is more than 80% leased with a total of 25 retailers, restaurants and services, including anchors Whole Foods, Sam’s Club and Regal Cinemas, plus Wyatt’s Wine & Spirits, The Sports Authority, Gold’s Gym, Party City, Chuck & Don’s Pet Food and Supplies, Parry’s Pizza, Bad Daddy’s Burger Bar, The Melt, Pie Five, Culver’s, Fuzzy’s Taco Shop, Village Inn, Jersey Mike’s, Visionworks, Supercuts, T-Mobile, Verizon Wireless, Luxury Nails and Spa, Ripple Effect, Pacific Dental, Spavia Day Spa and Samuels Jewelers.
All of these retailers will surround an intimate and engaging village that includes special amenities – fountains and park space, an amphitheater and play area, fire pits, lighting, lush landscaping, complimentary high speed WiFi music and more – plus a full calendar of exciting community events and activities.
Designed with a National Parks theme, Village at the Peaks is being constructed on the grounds of the since-demolished, enclosed Twin Peaks Mall. The Village at the Peaks will offer mountain views in an open-air environment with places for people to play, relax and recharge. The new destination will offer both quick and convenient shopping and welcome attractions for a day of movie-going, shopping, dining and enjoying a beautiful Longmont setting.
85% of the tenants committed to the project are new to Longmont, and of the tenants already announced, more than 80,000 square feet of selling area includes clothing, shoes and other apparel items – more square footage than the original sales area of the former Dillard’s.
Fuzzy’s Tacos Brings Fresh Food and FunQ&A with Marc Rogers, owner of Fuzzy’s Taco Shop, which is coming soon to Village at the Peaks.
Q: What makes you excited about coming to VATP?Village at the Peaks is going to be the new happening place in Longmont and a hub for entertainment, shopping and dining.
Q: What is it about Longmont that you love or think your concept would do well here?
Longmont is growing, and the demographic of the people fits with Fuzzy’s new, fresh, neighborhood bar and restaurant concept with awesome and affordable Mexican cuisine.
Q: Give us a little history/background on Fuzzy’s Taco Shop.Started in 2003, we have two restaurants in Fort Collins as well. A fresh, Baja-style concept, 90 percent of our light and fresh Mexican food is made from scratch. Folks love our unique spin on tacos, with a special homemade garlic sauce, cilantro, and the secret ingredient, feta cheese.
Q: What food will people be sampling at the Block Party? We’ll be making fresh tacos cooked on site, along with chips and queso.
NewMark Merrill Mountain States has moved its offices to better serve the community. We are now located at 630 15th Avenue, Suite 100, Longmont, CO 80501. Please contact us at 720-438-2500, or online at newmarkmerrill.com.
Page 4 — Retail Properties Quarterly — September 2015
With 1.5 million square feet of absorption in the past three quarters, our retail market is at a highpoint midway through 2015. Marketwide
vacancy, which has been declining con-sistently since 2012, is hovering around 5 percent and the average asking lease rate is at $15.48 per sf, a 2 percent increase from a year ago. Compared to most markets around the country, Denver fared well in the most recent downturn and has not looked back.
Denver is experiencing positive employment and housing growth. Colorado had population growth of approximately 1.65 percent in 2014, ranking No. 4 in the nation. Our cur-rent unemployment rate is 4.2 percent, compared with 5.5 percent nationally. We have had steady job growth since the recession, ending 2014 with an increase of approximately 60,000 jobs.
Our prosperity is a product of an elongated run of positive economic fundamentals accompanied by a his-torical imbalance in the retail space being delivered. Over the last 30 years, Denver delivered an average of over 3.5 million sf of retail space on an annual basis. Since 2010, this number has barely eclipsed 1 million sf per year, which is the case over the last 12 months as well. The current momen-tum undoubtedly will bring an increase in construction, yet it promises to stay controlled as stricter lending require-ments, rising cost of construction and onerous entitlement policies will keep new inventory in check. Additionally, tenants are eager to find infill locations where new development is more com-plicated, costly and time-consuming.
Housing starts are up 19 percent
from this time last year and we are on track to exceed the 8,000 single-family starts from 2014. This is a figure that is unmatched since 2007. Addition-ally, there are 40,000 multifamily units under construction or planned in the metropolitan area. This construction is a direct impact of the millennial
generation, which is widely seen by retailers as a lasting consumer base. Denver was the No. 2 city in the nation for millennial population growth in 2014, according to Slate.com, trailing only Austin, Texas. It is estimated that 22 percent of Denver’s population is millennials.
Another main factor contributing to Denver’s success is the diversifica-tion in our economy. Prior to this cycle Denver was known for having an up-and-down, boom-bust economy. The new economy boasts growth in key industries such as health care, finan-cial services, technology, aerospace and energy, none of which has more than 18 percent of the economy, energy included. This diversification brings sustainability to our current market trends and creates a fundamental shift in Denver’s appeal to investors worldwide. This dynamic resulted in Urban Land Institute ranking Denver the No. 4 market for commercial real estate investment in 2015, and Busi-ness Insider Magazine ranking Denver as the most comprehensive city for
economic growth. Recent sales in Den-ver show a steady line of new buyers to our market. Led by Canadian capi-tal, these buyers consistently include institutional-grade international capital for the first time. For most capital, the main concern is not with wanting to be in Denver, but rather finding enough larger, quality assets to purchase.
Denver earned a spot at the table when there is a record amount of capital available to invest in real estate (reported to be up 25 percent, to nearly $250 billion). The cards are stacked in our favor. Values for retail properties will continue to climb, as the lack of available space will drive lease rates higher. With quality (credit and lease term) as the main factor, cap rates will continue to compress, especially for the highly sought-after grocery-anchored and power centers. Single-tenant and small-format retail will experience the same success as anchored assets and remain the option of choice for private trade buyers.
We will see increased construction at a controlled pace. Even with the recent closings of several Safeway stores, the grocery sector will continue to surge, evidenced by the recent opening of Evergreen’s King Sooper’s Marketplace at Serenity Ridge in Aurora. Others in the sector, such as Sprouts, Trader Joe's and Whole Foods, also will see new store openings. Fueled by unprec-edented cap rates for large quality proj-ects, we already are seeing develop-ment and there will be more to come including Promenade at Castle Rock, Glendale Riverwalk and University of Colorado's Ninth Avenue campus, as well as others.
Although the number of transactions
will increase, retail investment sales volumes may taper. Cap rates also may rise, based on the nature of the product offered to the market. Sales volume was down in 2014 as a number of high-profile power centers were sold in 2013, which was kicked off by the sub-6 cap rate sale for the south Denver mar-ketplace. Although Denver has been a value-add trader's market, grocery-anchored shopping centers histori-cally have traded to portfolio-minded ownership. This phenomenon, coupled with the number of power center and grocery-anchored sales in the last few years, has left few larger, quality assets for the investment marketplace. With new development lagging, the imbal-ance between supply and demand will widen and cap rates will continue to compress. The average annual cap rate for investment sales has bounced around over the past few years, but this is tied directly to certain types of assets rolling through the cycle at dif-ferent times. The value trend on any given asset is up and this will continue unless we have a notable increase in interest rates.
Available debt continues to create value in the marketplace as 10-year Treasury rates are close to all-time lows, near 2 percent. Interest rates are so low that the spread for lend-ers remains historically high. Unless there is an unexpected dramatic hike in interest rates, cap rates should not move in direct proportion to rises in interest rates, as lenders take up the cushion in current spreads. In Denver, the impacts of aggressive capital and increasing fundamentals will have a greater impact on value then any antic-ipated movement of interest rates.s
Page 6 — Retail Properties Quarterly — September 2015
There’s no denying it. Restau-rants and breweries are pop-ping up everywhere around Denver. It seems that all you hear about these days are the
new restaurants and breweries that are dominating the Denver marketplace. There are even websites solely dedi-cated to tracking new restaurant open-ings. However, these areas still need traditional service retailers as comple-mentary pieces to provide a necessary tenant mix.
Although you may not read about it in the news, traditional service retail-ers are, for the most part, expanding rapidly and boding quite well in the marketplace. Retailers like AT&T, Wells Fargo, Rite Aid and Supercuts are open-ing several new locations throughout the Denver metro area. This activity goes largely unnoticed; it’s simply not as fun as talking about the new restau-rant down the street. When was the last time you met your friends at the neighborhood drug store to hang out for the evening? Despite the fact that their story is not being told, traditional retailers provide essential benefits and services for neighborhoods and shop-ping centers that restaurants cannot.
There’s no doubt that trendy restau-rants make good tenants and provide value to neighborhoods and shop-ping centers. Everyone loves a new restaurant, and they are essential in generating activity and bringing life to an area. One example is Tennyson Street in Denver Highlands. Over the past 15 years, this neighborhood blos-somed into a restaurant mecca and a desirable place to live. The restaurant scene and the skyrocketing housing prices go hand-in-hand; restaurants
create a sense of place and can help develop a neigh-borhood’s identity while attracting new homeowners to the area. Because of all this good publicity from restaurants, it’s no wonder why landlords, shopping center owners, gov-ernment officials and the average consumer want
more of them.Despite all of the activity and excite-
ment restaurants generate, they tend to be a higher-risk tenant. Restaurants cannot provide the stable financials that some traditional retailers can. Res-taurants also require significantly more parking, impacting adjacent retailers and, ultimately, the surrounding neigh-borhood. Take a look at Denver West Shopping Center, which largely is dom-inated by restaurants. Parking has been a challenge since the project opened, and consumers may opt to go down the street to avoid it all together solely because of the parking situation.
Enter traditional retail. Traditional retailers can lower the risk financially and alleviate the demand for parking. These retailers often are an after-thought for consumers until they find themselves driving further than they want to for simple conveniences. Who wants to sit in traffic to go to the bank, buy dog food or get a manicure? The Denver metro area and Colorado are booming with growth – metro Denver has seen the fastest-growing home prices of large U.S. cities, according
to several reports. Traffic is becoming more congested and the distance peo-ple are willing to travel is decreasing, which is especially true for millennials, the key demographic group for almost all retailers in the area. This warrants a need for convenient service retailers in neighborhoods. At the end of the
day, people need and expect services at their fingertips, even though the idea of this is less attractive than a trendy new restaurant.
So what is the best mix for a neigh-borhood? As we saw with Tennyson
Why traditional retail balances restaurantsDenver Metro Update
Rhonda CoyPartner, Crosbie
Real Estate Group, Denver
Photos courtesy: CrosbieRestaurants trigger shopping center activity and traditional retailers fill the gaps.
Neighborhoods require restaurants and convenient service retailers.
Page 8 — Retail Properties Quarterly — September 2015
unmatched commercial real estate services.
Full-service integrated real estate solutions for tenants, buyers, landlords, owners, developers and investors - regionally, nationally and around the globe.
1800 Larimer Street, Suite 1700, Denver, CO 80202 T 303.892.1111 www.ngkf.com
Leasing Advisory Global Corporate Services Investment Sales and Capital Markets Consulting Program and Project Management Property and Facilities Management Valuation and Advisory Services
Investor demand for core retail assets continues to remain extremely strong. Denver still retains a favorable outlook for most retail asset categories.
Investment price points including average transaction value, average size and capitalization rates from
transactions occur-ring over the past year are indicated in the table. The market data sets were limited to centers with sta-bilized occupancy and those for which the confir-mation of transac-tion details were attained.
The market sur-vey focuses on three general types of retail shopping
center – power centers, grocery-anchored centers and nonanchored strip centers. Assets in the power center category tend to be larger in size and include an array of large format stores that specialize in particular merchandise catego-ries. Power centers include big-box retail; for example, a 40,000-square-foot home improvement store like Lowe’s located next to a pet supply store like PetSmart at 18,000 sf, with smaller retail filling in.
Assets that fall into the grocery-anchored centers are easily identi-fied as a 50,000-sf grocery store, King Soopers for example, sur-
rounded by smaller retail service providers.
The final asset category is nonan-chored neighborhood strip centers. The smaller retail centers fill gaps in 1- to 3-mile trade areas and often include a restaurant, quick-serve food options, convenience stores or other established retail concepts that can draw traffic on site.
Each type of center has a differ-ent transaction value, size and cap rate range. Cap rates effectively provide an indication of return on investment, which can be an accu-rate measure of current investor demand. Although each center is made up of varying types and sizes of retailers, there are many com-mon characteristics that often are identified with lower implied cap rates. As with most retail, location matters. Being positioned in an area with high incomes, high population density and high levels of traffic exposure is the main characteristic. Established centers that are under 10 years old, with strong tenant sales, and that have an average remaining lease term that exceeds five years are other common traits
that are associated with lower implied cap rates.
Power center transactions are in the $50 million to $500 million price range. Implied capitalization rates for recent transactions ranged from 5.5 to 7.2 percent. Power centers that are made up of market-dominant, large-format retailers with multiple soft goods retailers, and have a high ratio of tenants with credit ratings above or near the investment-grade tier have lower implied cap rates.
Grocery-anchored center trans-actions included in the market data set had sales prices in the $10 million to $50 million range. Implied capitalization rates for these transactions range from 5.5 to 7.9 percent. There are two pend-ing transactions, which are priced with implied rates near the low end of the range, and if the pending transactions were considered in the previous data set, the average rate would be lower.
Strip center transactions typically have sales prices under $10 million. Implied cap rates for recent transac-tions were in the 6.2 to 9.25 percent range. Shadow-anchored strip cen-
ters (those that are in proximity to a grocery store or large general mer-chandise store) are identified with lower implied cap rates.
I have also gathered some broker feedback. In addition to looking at market activity over the past 12 months, I solicited feedback from market area brokers who specialize in retail.
Feedback from retail brokers about current market trends and pending transactions consistently suggests that demand remains exceptionally strong and investors are willing to accept increasingly lower yields for core retail assets. Investors are concerned about inter-est rates and are watching trends, however, near-term demand is not currently being impacted. Returns still exceed underlying mortgage return requirements, in most cases, and many institutional investors are placing equity into an investment that requires no debt. Rising interest rates are anticipated to impact cat-egories favored by smaller investors and value-add investors who may require a mortgage component as part of their investment strategy.s
Page 10 — Retail Properties Quarterly — September 2015
Real estate opportunity, like any other market-driven discipline, goes through cycles. For years the rolling green open fields and subur-
ban parcels just waiting for an idea were plentiful. New homes were in demand with affordable financ-
ing and there was an aggressive and expanding stable of national retail-ers who followed the housing and filled retail devel-opments. New development was build-to-suit and retailers and res-taurateurs would knock out cookie-cutter designs and stores aimed at keeping costs low
and operations as much the same as possible.
Today’s real estate realities are higher costs for all aspects of devel-opment and construction, challeng-ing financing and fewer retailers to help populate new centers. It is becoming more difficult to find clean opportunity locations and, once developed, to price it affordably. In addition, the suburbs, traditional hotbeds of development, are becom-ing harder to be positioned where and how people want to live. While open-space development continues in the outer edges of the metro area, developers, retailers and restaura-teurs are looking to older and pre-viously underdeveloped neighbor-hoods and cities as the location for their next great idea or concept.
Enter urban and transit-oriented development. As connectivity and lifestyle choices become real deci-sion points for today’s customer, finding locations within the older parts of the market is good business. An urban infill project requires cre-ativity and vision by all parties in a development – developer, investor, tenant, retailer and, in many cases, the cities where the opportunities lie. The most successful projects in recent years have had a distinctive urban flair to them – Lower Down-town, Union Station, Highlands, Stapleton and Lowry are examples of crown jewels of development in recent years. Newer projects like River North and northwest Aurora’s Westerly Creek area are poised to offer developers and entrepreneurs alike wonderful opportunities to cre-ate livable, creative and profitable projects.
The proliferation and success of the light-rail system has opened up new development possibilities in many communities. In Aurora alone, there are nine light-rail stations, all with development opportunities for residential, office or retail. Unlike other urban infill projects, TODs offer the retailers and developers new and well-positioned space in established neighborhoods. Because most of the neighborhoods already are located close to the core of downtown and offer housing that has character and mature landscaping, this is attractive to young professionals. TODs can be new while still offering what’s best about an existing neighborhood. Since many of the new residents to Colorado appear to be living near and around downtown, TODs meet the needs for urban living, transpor-tation and connectivity without hav-ing to go to the suburbs to find an interesting place to live.
For retailers and restauranteurs, urban infill locations provide unique challenges. While the suburbs offer uniformity and space, infills and retrofits tend to have irregular space, parking issues and infrastructure expenses needed to bring the best locations to code. In the past, that was not worth the hassle, but urban neighborhood demographics are changing and as the lack of quality suburban locations become scarce, many retailers are embracing the challenges of urban locations, flexing their design and operational muscle, and looking for their place in serving these markets. Sprouts built its first urban store in Colorado on Colfax, and it is one of its top stores in the country. Nearby, Chic-fil-A designed a new urban prototype, and it is performing strong in sales. These successes, in part, spawned a mini development phase in the surround-ing area.
Cities also have to be willing to work with developers and retailers to help make infill projects work. Aurora is proactively working with large and small developers who are interested in updating potential locations for retail and residen-tial development, especially in the northwest neighborhoods. Incen-tives for major tenants, concepts and developments aimed at growing the surrounding neighborhoods, increas-ing housing density and increasing sales tax revenue are part of the support and focus of the city’s pro-gram. An example of urban infill development partnership is Stanley Marketplace, slated to open spring 2016. Located in a refurbished avia-tion factory, Stanley Marketplace will host restaurants, including the newest Kevin Taylor concept, shops, services and entertainment venues. Like its national counter-parts, Chelsea Marketplace, The
Ferry Building and Gotham Market, Stanley Marketplace will offer metro customers a regional destination, while servicing the nearby needs of the Aurora, Stapleton, Anschutz and Lowry neighborhoods. Since its announcement, Stanley Market-place has served as the conduit for new residential, retail, restaurant and innovation office development activity in the Westerly Creek and northwest Aurora area. Couple Stan-ley Marketplace’s commercial infill development with the facts that the immediate surrounding area is one of the most affordable housing mar-kets in the metro area and is less than 30 minutes from downtown, and you have a recipe for potential development success.
Urban infill is a trend that is expected to drive much of the metro area’s new and most interesting development growth over the next few years.s
Urban infill and TOD drive creative developmentDevelopment
Tim GonerkaRetail specialist, city of Aurora,
AuroraPhoto courtesy: Mile High Development
The Regatta Plaza TOD redevelopment sits at S. Parker Road and S. Peoria Street.
Photo courtesy: Flightline DevelopmentThe Stanley Marketplace is a refurbished aviation factory.
Photo courtesy: Flightline DevelopmentThe Stanley Marketplace will host restaurants, service shops and enetertainment venues.
Page 12 — Retail Properties Quarterly — September 2015
Yes, it’s true. If you Google, “Is the shopping mall dead?” you will find a number of articles citing facts and fig-ures relative to changing
demographics, shopping habits, decreased sales per square foot, downsizing of national department
store brands, mall closings, lack of new mall construc-tion and limited funds available for remodeling.
In actuality, about 80 percent of the country’s 1,200 malls are con-sidered healthy, reporting vacancy rates of 10 percent or less, according to CoStar Group (a leading provider of data for the real
estate industry). However, in 2006, 94 percent of malls were considered healthy. Nearly 15 percent of malls are 10 to 40 percent vacant, up from 5 percent in 2006. And 3.4 percent of malls, representing more than 30 million sf, are more than 40 percent empty, a threshold that signals the beginning of what many refer to as the “death spiral.”
Industry executives freely admit that the mall business has under-gone a profound bifurcation since the last recession. Yet even with all these facts and figures at our disposal, many of us have failed to recognize that the mall is not dead or dying, it just isn’t what it used to be. In fact, it’s not even located where it used to be. Traditionally conceived of as an oasis of retail in the midst of suburban sprawl, the “new mall” is growing before our eyes, extremely profitable, respon-sive to its target demographic, in tune with rapidly changing technol-ogies, and respectful of its context and culture.
So where is this “new mall?” The next time you take a trip abroad or to many of our major airports throughout the U.S., take a moment to look at the changing retail envi-
ronment within the airport. Almost every major airport either has recently upgraded its retail environ-ment or has plans in place, ongoing or in the works, to completely over-haul its retail component. With an average retail vacancy rate of only 5.4 percent, airports are essentially rebranding themselves into a ser-vice retail mall by recognizing how critical it is to the bottom line to tap into an existing captive audience of millions of people – a captive demographic that is shifting such that the tradition of trinket shops, duty-free liquor, fast food and news stands is no longer appropriate.
As in most growth-oriented retail typologies, there typically is a formula that can be applied to enhance the potential for success. It’s true for airport malls as well, yet the formula is quickly evolving as airports redefine their brand and technology merges with bricks-and-mortar construction.
We know, for example, that there is a correlation between dwell time and propensity to buy something, yet the old adage of “the more they shop, the more they will buy” is no longer true in airports. Convenience is the buzzword for airport retail.
In fact, new data from retail kiosk maker NCR shows 24 percent of U.S. travelers will buy a gift this holiday season at the airport as last-minute shoppers use the downtime before their flights to top off their Christ-mas lists. To enhance convenience shopping, many fashion and cloth-ing stores have discarded the dress-ing room. These stores recognize that shoppers’ desire for speed and convenience rarely allows for lin-gering and trying on various outfits so the product line includes more tops and accessories.
Other convenience-related solu-tions include phone apps that allow users to connect with terminal res-taurants and have food delivered directly to a gate, pop-up stores and kiosks located throughout the terminal that link back to the bricks-and-mortar hub store, and users now can pre-order before they arrive at the airport and have prod-
ucts delivered to a gate, or pack-aged and ready to go at the retailer checkout counter. Some airports are allowing stores to physically merge with waiting and seating areas, blurring the line between the public concourse and retail store.
Most of the recent trends are coming from airports overseas where high-speed transit systems, guaranteed price match with inner city stores, on-the-spot shipping abroad and stores located outside of security are stimulating the rebranding of the airport as a desti-nation mall and commerce center.
Following are a few additional trends that are leading the way in the revitalization of airport retail and restaurant services.
Local and Regional SpecializationIn an effort to differentiate and
connect to local and regional cul-ture, airports are actively seeking out local vendors for food service as well as retail. Portland’s Inter-national Airport focuses on craft breweries and local retailers like cc McKenzie Shoes & Apparel, Colum-bia Sportswear and Powell’s Books. Johannesburg’s O.R. Tambo has local artisan stores with the same quality of arts and crafts found throughout South Africa. Our very own Denver International Airport attracted local restaurants like Elway’s, Modmarket and Root Down to cement its brand.
The new mantra at airports is to offer differentiated product, in a captivating environment, and deliver in the most efficient man-ner. Does that sound familiar? It should, since this is exactly what bricks-and-mortar shopping centers and malls outside the airport are focusing on as well. The tradition of lining up one nondescript national brand after another is quickly fad-ing.
Convergence of the Digital and Physical Channels
Surprisingly, only 10 percent of all retail purchases are completed online. Which most likely is why webrooming (researching items
online, then purchasing them in a store) is rapidly replacing show-rooming (shopping in a bricks-and-mortar store without purchasing an item while searching online to find a lower price).
To enhance the in-store purchase process and experience, retailers not only are integrating self-serve kiosks and bar code scanning checkout, but also radio-frequency identification that triggers promo-tional messages when you pick up a product in the store. Soon RFID readers will replace the antiquated check out process we are all famil-iar with, instead scanning your bags when you leave a store, and pay-ment is automatically made via a suitably enabled mobile phone (or tiny chip embedded in your forearm or teeth), which is linked to your bank account or credit card. Yet, even with all the new technology, retailers have recognized that they do need to alter the physical layout of their airport stores. Aisles have to be wide enough for luggage, and pristine storefront displays used in malls often have to be discarded in favor of more open concepts and the stacking of merchandise at the stores entrance.
Rethinking the Order, Purchase, Checkout and Delivery Process
Restaurants are leading the way with delivery to your gate (look up Airside Mobile’s “B-4 You Board” app, presently available in five air-ports, but expanding rapidly) and digital order kiosks. Our recent pro-posal for an Icebox Café restaurant at DIA includes digital and physical ordering, delivery to the gate, and even connectivity to an Icebox res-taurant at the other end of your trip so your order is waiting for you at your next destination.
Blurring the SectorsWhile coffee shops merge with
bookstores and supermarkets offer medical assistance, airport malls are blurring the sectors on a much larger scale. Amsterdam’s Schi-phol Airport has a super mall that
Are shopping malls being reborn in airports?Perspective
Jeffrey Sheppard
Co-founder and design principal, Roth Sheppard
Architects, Denver
Photos courtesy: Roth SheppardIce Box Cafe is a restaurant that is opening in the Dallas/Fort Worth International Airport. There is one proposed for DIA as well.
September 2015 — Retail Properties Quarterly — Page 13
includes a library, art museum and casino. Hong Kong’s International Airport has a huge 3-D theater, over 160 stores and a golf course. Dubai’s International Airport duty-free opera-tion has over 200,000 square feet of luxury retail and monthly raffle draw-ing giveaways of sports cars and $2 million in cash. Shoppers are rewarded
with more raffle tickets based on the amount of purchases they make.
These trends are becoming common-place and can be observed at several national and international airports.
If you think this idea of the “new mall” is foreign to DIA, think again. There are major plans in the works at the airport to rebrand the Jeppeson Ter-
minal and turn it into more than just a sinuous line of disgruntled passengers waiting to be checked through secu-rity. Finally, the grand hall of DIA will be positioned to become the show-case and public space it was meant to be. Even with the unfortunate visual mistake of the soon-to-be-open “bookend hotel,” DIA remains
one of the most memorable and enjoyable airports in the world. Let’s hope our airport management team and city officials are in tune with what’s going on internationally, and that they embrace the potential our light-filled, iconic, nationally recog-nized airport has to lead the way in the rebirth of the new mall. s
Perspective
Restaurants, coffee shops, bookstores and apparel retailers are blurring the line between airport and shopping mall.
cbre.com/denvercbre.com/fortcollins
cbre.com/coloradosprings
Pete SchippitsSenior Managing Director+ 1 720 528 6440
For more information on how CBRE can assist you with your commercial real estate needs in Colorado please contact:
CBRE KNOWS RETAIL.As the leader in the local retail market, we have the
insight and perspective to anticipate what’s next and
what it means for our retail clients.
With 259 retail transactions completed and more than
2.7 million square feet of retail space leased and sold
Page 14 — Retail Properties Quarterly — September 2015
“We are seeing much more fragmen-tation in the fitness industry, with smaller clubs located alongside big-ger clubs.”
While big facilities like Colorado Athletic Club have established a presence downtown and in the Denver Tech Center, studio gyms are working well in smaller neigh-borhoods like Washington Park and the Highlands. It simply comes down to the issue of space – small clubs don’t require as much and can enter into those areas more easily. However, the argument that can be made for large clubs not wanting to get into each neighbor-hood is that people are more apt to travel to a bigger club.
Whether people travel to a big club or walk to a nearby neighbor-hood studio, the one thing that all
facilities are benefiting from is that Colorado is a premier setting for fit-ness. The state has a reputation of being a destination market for mil-lennials and having an atmosphere of fitness-oriented people who require sophisticated training. There is more focus on health and well-ness than ever before, and people in the state seem determined to get in shape and stay in shape for both the ski season and summer.
“Colorado is seen as a test mar-ket for new concepts, whether it is for food or fitness,” said Matthew DeBartolomeis, vice president of retail services with CBRE. “What we are experiencing is a nationwide trend.”
From New York to California, the studio fitness concept is popping up across the country, not just in Colo-rado. People are interested in and gravitate toward unique or more
specialized fitness. Core Power Yoga, Yoga Pod and Orange Theory Fitness are a few of the studio facilities that are gaining popularity. Weisiger and DeBartolomeis said one concept that could soon enter the mar-ket and have a big impact on the industry is cycle fitness. Flywheel, SoulCycle and CycleBar are brands that have been introduced to other markets.
The small class settings that these specialty studios provide only require 3,000 sf to 5,000 sf of space, making shopping center retail space the ideal fit for these concepts. Although, trying to find these spac-es now is less than ideal.
“Every fitness store wants to be in retail shopping centers alongside other retail, but those spaces are fewer in number,” said Weisiger. “There was a time period when some of the larger clubs were mov-ing into second generation spaces, but even those spaces are much tougher to find because the space is not well suited or well located for where they want to be.”
The options many fitness centers are left with are building a new place or a build-to-suit property, both of which drive up costs. Fit-ness centers have a greater need for restrooms than typical retail and, in some cases, necessitate shower facilities as well. The hours of opera-tion for fitness varies and the park-ing can be more intensive at certain points of the day, depending on when classes are offered. “Because of these requirements, fitness cen-ters are selective and, although some stores will continue to look to expand, it will be in locations that fit with rent structures and demo-graphics,” said DeBartolomeis.
Many fitness centers are thriv-ing in Colorado because personal preferences differ. Some like the large club feel that includes tennis and swimming, while others prefer a smaller setting or more special-ized program. The questions now are how many more concepts can Colorado support, and where will they go?s
Continued from Page 1
Fitness
Clubs and facilities within the industry can be broken down into four different categories, according to CBRE's Matthew DeBartolomeis – lifestyle clubs, general clubs, value-priced clubs and specialty fitness. Following are examples of each and the size ranges.
Lifestyle ClubsColorado Athletic Club and Life Time Fitness – 35,000 sf to over 100,000 sf
General Clubs24 Hour Fitness, Tru Fit and Gold’s Gym – 20,000 sf to 40,000 sf
Value-Priced ClubsYou Fit and Planet Fitness – 15,000 sf to 25,000 sf
Specialty FitnessCore Power Yoga, Yoga Pod, Orange Theory Fitness and Anytime Fitness – 2,500 sf to 6,500 sf
Fitness Facility Types
‘Colorado is seen as a test market for new concepts,
whether it is for food or fitness. What we are experiencing
is a nationwide trend.’ – Matthew DeBartolomeis, CBRE
In a 2003 American Express advertisement, celebrity chef Rocco DiSpirito claimed that nine out of 10 new restaurants fail within the first year. Unfor-
tunately, that was not the first time I had heard this ridiculous claim, but coming from a celebrity chef, and on national television, really?
Since 1994 I have been battling, begging and even pandering to lenders for funding for restaurant projects, tenants and buyers. Then, thanks to nationwide advertise-ments like the one from American Express, my job become even hard-er. I always estimated the restau-rant failure rate to be similar to the retail failure rate in general. Slowly I began educating lenders, at least the few that would listen, about false claims of high restaurant failure, based on my professional experi-ence and the very low failure rate of our restaurant clients.
The “90 percent first-year fail-ure rate” of restaurants already had grown to mythic proportions, though, and it was hard enough to debunk the myth itself, let alone American Express and chef DiSpiri-to. Thankfully, I found an article written by Jeff Grabmeier from Ohio State University titled “Restaurant Failure Rate Much Lower Than Com-monly Assumed,” which referenced research by Dr. H. G. Parsa. The study focused on 2,439 restaurants in Columbus, Ohio, using health department data over a three-year period (1996-1999). According to
Parsa’s research, the highest failure rate was in the first year at 26 percent, about 19 percent failed in the sec-ond year, and 14 percent in the third year. Parsa’s research showed that the cumula-tive failure rate for the three-year period was only 59
percent – a far cry from the 90 per-cent first-year failure rate claimed in the American Express advertise-ment.
Parsa focused on health depart-ment licenses that showed a change of ownership, which, in my opinion, is more accurate than other studies that rely on bankruptcies or data-base listings. However, a change of ownership does not necessarily mean the restaurant failed. Some of the restaurants in this group sold and continued to operate. Therefore, using this data, the true failure rate is considerably less.
It is important to note that res-taurant failure rates vary by state and by trade area for many rea-sons. An article published in Cor-nell Hospitality Quarterly, entitled “Why Restaurants Fail? Part IV: The Relationship between Restaurant Failures and Demographic Factors,” referenced more of Parsa’s research. The study was conducted in Boul-der from 2000 to 2010, and failure
rates were calculated for the first few years. The data showed that the first-year failure rate was 24.95 per-cent.
So why is the legendary 90 per-cent failure rate so easy to believe? The answer is simple; think about how you, as a consumer (not a landlord, broker or lender), relate to retail businesses in general. What is important to you? What can you live with and what can you live without? Now try to remember how many retail businesses have closed in the last few years, specifically how many restaurants have closed? If you are like most people, you remember more restaurants closing than other businesses, so you rea-son that the failure rate for restau-rants must be higher.
This misconception is easy to understand. Think about the last restaurant that you remember closing. Maybe you were going to meet a friend for dinner and drinks and discovered the restaurant you chose was closed. What happens next is very interesting, as you start remembering all the reasons why you liked that restaurant. Maybe it was the amazing homemade pasta, the cute bartender who made a great martini, meeting a friend for the very first time or maybe a memorable date. You had a personal connection to the restaurant and, therefore, its closing becomes a memorable event.
Now think about shopping for an item, for example, a new pair of
shoes. Perhaps you have a favorite store and you drive to your local retail center and discover that the store has gone out of business. You can search for another location, or maybe just glance across the park-ing lot and see another shoe store. Either way, your shoe problem is solved and it is not a memorable event.
Restaurants are a bigger part of our lives. You probably can name all the restaurants within walking dis-tance from your office, but can you name every retailer? When restau-rants close it is big news and many relate to it. Just like Heather Lock-lear in a Faberge Shampoo com-mercial from the 1980s, “I told two friends about it and they told two friends and so on and so on.”
The 90 percent failure rate isn’t the first urban legend to contra-dict fact, but it is one of the most widely distributed and believed. Sure, we can blame the media, the statistic-quoting experts that do not cite their sources or even American Express for this fallacy. However, I believe that banks play the biggest role in perpetuating the myth. After all, they have the most to gain, as it is much easier to ask for additional collateral and higher rates and fees for a high-risk or discouraged indus-try.
You can call the 90 percent first-year failure rate a myth or an urban legend, but I prefer simply to call it false. So please, start spreading the news!s
The myth about restaurant failure ratesRestaurant Update
September 2015 — Retail Properties Quarterly — Page 17
Retail centers thrive on cus-tomers coming to their center for services. Often shopping centers encour-age new retailers to move
in, in hopes of drawing more people or a different crowd to the center to provide new opportunities. But, there is another way to successfully draw customers to your center over a competing center – something as simple as creating an inviting land-scaping backdrop. Having pleas-ing, attractive and creative scenery encourages shoppers to visit your center, especially if it is next-door neighbors with the competition and their landscaping isn’t up to par.
When thinking in terms of curb appeal, landscaping can send a powerful message about the status of retail centers. Many retailers are focused on interior improvements while overlooking the exterior. The first impression is made outside and great landscaping might just grab the attention of a potential lessee, renter or shopper, while unkempt properties can have the opposite effect. Simply by maintain-ing the existing turf, plant mate-rial and trees, professional exterior landscaping can bring a recovery value of 100 to 200 percent at sell-ing time, according to Money Maga-zine.
Researchers have found that landscaping can add an estimated 7 percent to an average rental rate
for office space, according to the Natural Resources Defense Council, which also helps increase leasing, renting and sell-ing opportuni-ties. Following are research and sta-tistics compiled by the Florida Nursery Growers and Land-scape Association.
• Landscaping can increase the
resale value of a property by as much as 14 percent;
• The speed of the sale of a prop-erty can increase by as much as six weeks; and
• A landscaped curb can increase property value by 4.4 percent and hedges can add 3.6 percent.
Landscape in today’s retail envi-ronment has become more vibrant as trees, shrubs, plantings and park-like areas are highlighted through-out the fronts of retail centers. Aggressive landscaping programs for future retail development pro-vides the esthetics shoppers, cus-tomers and clients want.
Taking a look throughout the Front Range, there are several new retail centers being developed. These new developments are formed in a variety of ways, includ-ing repositioning of existing retail
centers, performing conversions or even adapting retail centers to an open-air concept. All of this rede-velopment is a perfect opportunity for centers to renovate the existing landscape by creating a fresh new look to go along with the new build-ings and centers.
Centers have many options that haven’t been available before when it comes to freshening sites. From hiring professional firms to create a completely different look, to stimu-lating the existing landscape, cen-ters need to decide which direction
is right for them. One example is Towne Center at Brookhill in Broom-field, which is well on its way to creating a new, fresh look through-out the center by reconfiguring the existing landscape backdrop.
The bottom line is that forming beautiful, well-maintained areas within and around shopping centers encourages people to spend more time. Retail centers have the ability to create a sense of place through the use of landscaping resulting in an experience that connects with shoppers.s
Encouraging shoppers to visit retail stores, shopping dis-tricts and restaurants, and keep them in that area for extended periods of time,
usually involves creating a unique or appealing destination.
It is known that many new trends start on either the East Coast or the
West Coast and then backfill into the remainder of the country. But looking at some recent publications, landlocked Colora-do isn’t far behind – Forbes Magazine ranked Denver the No. 1 best place for business and careers, and Sper-ling’s ranked the city No. 3 in best places as a city on
the edge of greatness and one of the most playful cities. The question is, what else can our state take away from what the coastal states are doing when it comes to public space trends?
Cities along the coasts have embraced parklets in a major way. Parklets are curbside areas designed to extend the public space in front of coffee shops, restaurants and unused public right of ways. They provide additional seating areas and gathering places and can energize neighborhood retail districts. They also are good for business. According to a study published by the Univer-sity District in Philadelphia, there is a 20 to 30 percent increase in sales
to businesses that are located near parklets. Right now Colorado boasts only a handful of parklets.
Another factor is the type of shopper moving to the state. Mil-
lennials are flocking to Denver and they are interested in teamwork, community and gathering places. So it goes without saying that com-munal space indoors and outdoors
is important. East and West Coast cities have embraced portable tables and seating in public spaces, while
Bringing new life into your retail center
Public space trends that benefit retailers
Landscaping
Public Space
Nicole StoneBusiness
development, Metco Landscape, Aurora
James ShafferFounder,
Streetscapes, Denver
Before and after photos of a landscaped island at Towne Center at Brookhill in Broomfield
Photo courtesy: StreetscapesBryant Park in New York City offers workers and city visitors a place to gather and relax.
Page 18 — Retail Properties Quarterly — September 2015
Technology
Every retail facility is looking for ways to attract customers and keep them shopping longer, whether it is
offering free Wi-Fi, children’s play areas, water features, background music or valet parking.
One of the most effective and proven ways to increase dwell time and aver-age dollars spent is to install elec-tric vehicle charging stations. The data is compel-ling. Kohl’s found that EV drivers
spend about 20 minutes more in store than non-EV drivers, while another major retailer found EV drivers spend more than three times longer in store. With statistics like these, the return on invest-ment is higher and easier to calculate than many other amenities.
However, before adding EV charging stations, do some homework regarding ser-vice providers, installation and maintenance. Don’t be suckered into an offer from a service provider that leaves
your store or shopping center with little power or control. Often service providers will ask to lease space to install charging stations at no cost. On the surface it seems like a no-brainer to let someone else pay for and manage a charging station on your property. The offer is compel-ling – no upfront investment in hardware, no maintenance fees and no day-to-day man-agement of a new technology. But, dig a little deeper and it quickly is revealed that this offer is too good to be true.
As it turns out, this scheme can become a disincentive. While the station might be installed at no cost to the property owner, someone has to pay for it, and in this model it is the electric car drivers. Because third-party-owned stations don’t benefit
from the additional shop-ping revenue, they recover their costs via a big markup on electricity, sometimes as much as five times the cost. As a result, the price the driver pays is high relative to other charging options. Unfortunately, once third-party operators start charging drivers high prices to plug in, your shopping center loses all of the benefits of having it in the first place. Shoppers no longer linger and spend more, but instead become clock-watchers, eager to leave as soon as they have enough power to do so.
Even worse, most of the contracts with third-party providers have long-term exclusivity clauses, which means you as the property
Universal Protection Service provides the best security solutions, personalized customer service and unmatchedvalue available. We now also offer our clients Safety Act protection from the Department of Homeland Security.Universal offers an expansive range of security solutions, consultations and investigations for properties of every type, including:
September 2015 — Retail Properties Quarterly — Page 19
Street and upcoming develop-ments like East Bridge at Sta-pleton, restaurants trigger the activity and generate a sense of community and place. Now we are seeing traditional retailers coming in to fill in the gaps. For instance, Natural Grocers is opening up a new location at 38th Avenue and Tennyson Street, the central point of the Highlands. Traditional retail and restaurants not only can coexist, but also can create synergy for neighborhoods,
consumers, developers and landlords. Both types of retail-ers are necessary and essential for a well-balanced shopping center and community.
With artful planning and architecture, all tenants can coexist. Union Station is a great example. Chef-driven restaurants like Mercantile and Stoic & Genuine create enthusiasm and a place for new residents to dine, and ser-vice providers like Wells Fargo and King Soopers provide key conveniences to an area starv-ing for services. Restaurants
generate gathering places and define communities and cul-tures. Traditional retailers help balance the risk, can allevi-ate parking issues and, most importantly, provide the nec-essary conveniences consum-ers notice only when they are not readily available. Despite the talk centered on new restaurants, traditional retail proves it is just as important to both established neighbor-hoods and new developments. After all, we all need more than a craft beer and great cheeseburger to survive.s
owner lose all control and cannot take any action on your own if their solution is failing. In fact, one prop-erty recently told a national customer of ours that they were prohibited from putting in their own charging sta-tion at their own cost due to an exclusivity clause with a third-party provider, regard-less of the fact that the other station would have been too far of a walk to use conve-niently. At another retailer, a third-party station has been out of order for nine months with no repair in sight.
Then there is the issue of image. Overpriced charging
fees paint your store or shop-ping center as being greedy and unreasonable, since the driver may not realize it is really a third-party station owner setting the price. For the same reason your store wouldn’t let a vendor charge $10 per session for Wi-Fi or $15 per child for the play area. If you did, why would you bother having those amenities in the first place?
If station management is the concern driving you to consider third-party own-ership, a better strategy is to find a charging station reseller that offers station management and mainte-nance services for a reason-able annual fee. This way you
retain control and receive the benefits of having a station, while outsourcing the day-to-day oversight.
While third-party owner-ship of EV charging stations on your site may seem like a great deal at first, the fact is that the host site rarely receives the promised benefit because the goals of attract-ing shoppers while extracting substantial charging revenue from them at the same time are incompatible. In the end, a third-party EV station can end up being detrimental to those shoppers who are elec-tric car drivers, and an unfor-tunate exercise in “green-washing” for your property.s
Traditional
EV
Continued from Page 6
here we have fallen in love with connected picnic tables. Not only are these types of seating arrangements hard to get into and out of, they also are awkward to use with the exception of one purpose, eating. Portable chairs and tables are the rage up and down the coasts because it makes it easy for people to hang out, collaborate and gather in public spaces.
My thought is, in a retail and restaurant environment, you are either sitting, wait-ing, watching or on the move.
Colorado has embraced art in public spaces, but could take a cue from our coastal neighbors and embrace pub-lic space as art. Funky public furniture, unique objects and cool visuals that lend themselves to photo ops and selfies makes sitting, wait-ing and watching much more interesting – not to mention increasing the linger value, which increases traffic and the opportunity for sales.
One area that Colorado, and especially Denver, has focused on is transporta-tion outside of cars. Like the East and West Coasts, we
are starting to view walk-ing and cycling as important modes of transportation. But moving between neighbor-hoods, retail districts and restaurants can be a chal-lenge when sidewalks are narrow, damaged or missing. The same can be said if the space adjoining the side-walk is threatening, unsafe and unappealing. Perhaps we can turn the tables here on our East and West Coast friends and lead them by creating pedestrian-friendly environments and restaurant bike parking that serves its intended purpose.s
PublicContinued from Page 17
Continued from Page 18
Photo courtesy: StreetscapesAn example of a parklet in Louisville, Colorado.
Page 20 — Retail Properties Quarterly — September 2015
The Colorado Lottery has given over $2.8 billion in distributions back to local communities and the state of Colorado through its pro-
ceeds partners program since its beginning in January 1983, when a single, $1 scratch game was
launched. Sales for the first fis-cal year were just under $137 million. Times certainly have changed over the last 32 years. Scratch tickets now are offered at pricepoints rang-ing from $1 to $20, with sales grow-ing to a record of $377 million in the recently completed 2014 fiscal year.
Lottery games contribute in excess of $500 million annually to lottery sales since 2010.
Retailer BenefitsLottery sales and proceeds at cur-
rent levels wouldn’t be possible without the efforts of more than 3,000 retailers across the state, from traditional lottery trade styles such as convenience and grocery stores, to independently operated liquor stores, bars, restaurants and bowl-ing centers, among others. Retailers that sell lottery products are paid a commission for every ticket they sell and for every winner they cash, which positively impacts the econ-omy along with providing an oppor-tunity for consumers and retailers to give back to their local communi-ties with every ticket purchased and sold.
Lottery retailers can be a single, freestanding business located in a neighborhood or part of a strip cen-ter in cities and towns across Colo-rado. It is important that retailers understand the importance of lot-tery profits and incremental sales to their bottom line as a result of the additional customers driven to their business. Also, it is important to understand that lottery players enjoy convenience and accessibility to lottery products at local retailers. However, there isn’t a presence in all centers, especially large regional, power, lifestyle or outlet centers where many consumers shop.
There are many reasons why centers choose not to be a licensed lottery retailer, but also there are some misconceptions that tend to dissuade others. Many are not aware of what type of retailers can
sell lottery products, who to contact or how to initiate the licensing pro-cess. Sometimes property and mall managers feel that lottery sales in their centers is not a good fit, or leases are written in a way that makes it difficult or less profitable for tenants to sell lottery. However, the most common issue seems to be the lack of awareness of the benefits lottery has to offer to busi-nesses, centers and the local com-munity.
The Colorado Lottery always is looking to license quality retail-ers and gain a presence in cen-ters where it is currently absent. Expanding the retailer base also is the only sure way to improve the accessibility to the product and increase sales and proceeds. Pro-spective retailers must ensure that lottery tickets can be sold securely, profitably and within the lottery’s high standards of integrity. Retail-ers and property managers should evaluate the benefits that come with selling lottery tickets and the positive impact it can have for their business, shopping center and com-munity.
Commissions and BonusesCommissions paid by the Colo-
rado Lottery are among the highest of any lottery in the country. Retail-ers receive 7 percent commission for scratch ticket sales, 6 percent commission for jackpot ticket sales and a 1 percent cashing bonus for all winning tickets validated at their business. They have an opportunity to earn additional marketing and selling bonuses as well. Total prof-its earned by lottery retailers have grown from just under $30 mil-lion in fiscal year 2007 to over $40 million in fiscal year 2014, which equates to an annual average of around $13,000 in gross profit per retailer. In addition to the increased cash flow and bottom-line ben-efits, the sale of lottery tickets can drive additional consumer traffic with lottery-sponsored promotions and advertising, all with minimal upfront costs for licensing and bonding fees to the retailer.
Proceeds DistributionsThe mission of the Colorado Lot-
tery is to efficiently create and sell its games with the highest stan-dards of integrity while maximizing proceeds for the people of Colo-rado. Profits from lottery sales are distributed to proceeds partners, including Great Outdoors Colorado, Conservation Trust Fund, and Colo-rado Parks and Wildlife. The groups
are tasked with distributing the funds to improve and support the creation of new parks, trails and recreational facilities, preserve open space, conservation education and wildlife projects, all of which posi-tively impact communities across the state. Spillover funds above the statutory limits are given to Build-
ing Excellent Schools Today, which issues funds in the form of grants to underfunded school districts to address health and safety issues.
Selling lottery tickets can ben-efit businesses not only because of additional traffic it can drive to cen-ters, but also provides an opportu-nity give back to the community.s
What benefits do the lottery provide to retailers?Retail Business
Joel MessmerBusiness
development specialist, Colorado
Lottery, Denver
Retailers that sell lottery products are paid a commission for every ticket they sell and for every winner they cash, which positively impacts the economy
Page 22 — Retail Properties Quarterly — September 2015
AmCap Properties, Inc.Ira Shwartz
Antonoff & Co. Brokerage Inc.Jeffrey Hirschfeld • Douglas AntonoffGene Stone
AXIO Commercial Real EstateJohn Livaditis • Tanner Johnson
CBREDenver TeamGlenn Anderson • Matthew DeBartolomeisJim Lee • Tom Mathews • Jon WeisigerJoella Rodarte • Dan Miller
Colorado Springs Brad Bird • Patrick KerscherDan Rodriguez • Whitney Johnson
Fort Collins Peter Kelly
Colliers International Lisa Vela • Jay Landt • Jason KinseyJoel Meranski
Colorado Group, Inc.Todd Walsh • Scott CrabtreeJessica Cashmore
Crosbie Real Estate Group, Inc.Scott Crosbie • Scott SteputisAndrew Buettner • Richard HobbsEli Boymel • Rich OtterstetterRhonda Coy • Jeff Germain • Sarah Alfano
David Hicks & Lampert Brokerage, LLCJoe David • Philip Hicks • Allen Lampert Scott Hagan • Andrew Fox • Steve YeagerErik Christopher • Steve MarkeyJ. R. Hagan • Bobby Kline • Jacob HawkinsRebecca Richards • Ken HimelMike Brunetti • Zander Rodriguez
DePaul Real Estate Investment Group, Inc.Matthew Watson • Charles Thompson
Dean Callan & Company Becky Callan Gamble • Brit BanksHunter Barto • Dryden Dunsmore
DTZ Americas Tyler Bray • David Fried • Robert HudginsRay Rosado
DTZ Greenwood VillageSid Dixon • Lucas Hayes • John ReynoldsJoe Solarte • James Wachholz • Max WeissKevin Winn • David Wyatt
Dunton Commercial Real Estate Company Bob Bramble • Danchen AstleTony Giordano • Paul Roberts • Mark FoutsLouis Lee • Charles Nusbaum • Chris SarosChris Vincent • Franz LehnertSofia Williamson • Manny Cereceres
Excell Fund Brokerage, L.L.C.Jeff Brock • Steve Cersonsky • Pete KellyVirgil Shouse
Front Range CommercialJay Carlson • Mark Cartier • Robert NoletteBob Cope
The Laramie CompanyMary Beth Jenkins • Bill Jenkins
Goldberg Properties Inc.Mark Goldberg
RE
TA
IL
BR
OK
ER
DIR
EC
TO
RY
For contact information, firm profiles and links, please visit www.crej.com, click on Industry Directory, then Brokers, then Retail subcategory
Retail Broker Directory@
If your firm would like to participate in this directory, please contact Lori Golightly at [email protected] or 303-623-1148 ext. 102
September 2015 — Retail Properties Quarterly — Page 23
Quantum Commercial GroupCandace Seaton • Lori Ondrick
Realtec CommercialTJ Antinora • Annah Moore • Erik BromanBruce Campbell • Patrick O’DonnellGage Osthoff • Nick Berryman • Tom Reznik
SRS Real Estate PartnersTony Pierangeli • Jim HoffmanJoe Beck • Brian Hollenback • Austin TillackTami Lord • Molly Bayer
SullivanHayes Brokerage – BoulderMichael DePalma • Sean KulzerDavid Dobek
SullivanHayes Brokerage – DenverTom Castle • Chris CookCourtney Dahlberg Key • Mark ErnsterMike Kendall • Emily KlimasJohn Liprando • Grant MavesBrian Shorter • Christopher AntonJosh Burger • Bryan SlaughterMark Williford
Tebo Development CompanyStephen Tebo • James Dixon
The Zall CompanyStacey Glenn • Stuart Zall
Trevey Land and Commercial Mitch Trevey • Nick Nickerson • Raj Maddhi
Unique Properties Inc.Marc S. Lippitt • Scott L. ShwayderTim Finholm • Brad Gilpin • Phil YeddisGannon Roth • Allen FreedbergSamuel Leger
Valentiner & AssociatesSheri Valentiner
W.W. Reynolds Companies, Inc.Chad Henry • Nate LitseyMarty McElwain
WalderaScott Real Estate PartnersKimberly Waldera • Noah WalderaScott Nannemann • Paul Klink
Western Centers Inc.Gracie Kitajima • Arnie Meranski
Western Investor NetworkTony Hemminger • Charlie PerryPinar Bayraktar • John Jumonville
WestStar CommercialTim Hakes • Kevin HayutinMichael Hayutin • Stephanie Keyes
Pinnacle Real Estate AdvisorsJames Beebe • Justin BrockmanEric Diesch • Tom EthingtonJeff Johnson • Justin KriegerJamie Mitchell • Billy RiesingMatthew Ritter • Peter SengelmannCody Stambaugh
Retail Broker DirectoryR
ET
AIL
BR
OK
ER
DIR
EC
TO
RY
If your firm would like to participate in this directory, please contact Lori Golightly at [email protected] or 303-623-1148 ext. 102
