Page 14 —
COLORADO REAL ESTATE JOURNAL
— March 16-April 5, 2016
Retail
by John Rebchook
Centennial-based Kelmore
Development has developed
about a million square feet of
retail space since it was founded
about 35 years ago.
Almost all of it was in the sub-
urbs, primarily in the southeast
corridor.
Now, it is tackling a high-pro-
file urban development in Den-
ver.
Kelmore has been chosen by
the Lowry Redevelopment
Authority to be the main retail
developer at Boulevard One at
Lowry.
Boulevard One is the final
development piece of Lowry,
since the former Air Force base
was shut down and replaced by
one of the nation’s most success-
ful redevelopments of a former
military base.
The mixed-use center at Lowry
Boulevard and Quebec Street
that Kelmore will be developing
is zoned for 185,000 square feet,
although it likely will have less
space than that when it is built.
Kelmore is part of a team with
Embrey Partners, which will be
developing a luxury 350-unit
apartment community across
from the mixed-use center by
Kelmore.
The Embrey-Kelmore team
beat out 13 other developers for
the development assignment.
“Kelmore is the kind of bou-
tique developer we were look-
ing for,” said Monty Force, LRA
executive director.
“They’re fully committed to
our vision and willing to work
collaboratively to build a place
that gives this neighborhood a
real vibe,” Force added.
In one respect, Boulevard One
is a bit of a departure from what
Kelmore has done in the past.
“I think you could probably
say that this is our first urban
project,” said Bob Koontz, prin-
cipal and managing partner at
Kelmore.
“However, I would say that
our Greenwood Village devel-
opment is more urbanlike than
suburbanlike,” he added.
In fact, the differences between
urban retail andmixed-use devel-
opments and suburban ones
increasingly are being becoming
blurred, he said.
Anew suburban development,
for example, no longer typically
consists of big-box anchors sur-
rounded by acres of parking.
“I think an urban tenant, such
as at Boulevard One at Lowry,
might be a little smaller” than a
suburban counterpart, he said.
But there would not be much
difference in size, as suburban
retailers also want to make sure
they have an efficient floorplan.
With rising land prices and
construction costs, it makes
sense not to build suburban
developments bigger than
needed, he said.
And suburban developments
increasingly are becoming more
walkable, he noted.
In any case, Lowry is a great
place for Kelmore to expand
beyond the southeast suburbs,
he said.
“The thing about Lowry is that
it is very walkable,” Koontz said.
“When you look at how well
Lowry is connected to trails and
how accessible it is, it really is
urban infill at its best,” he said.
And Boulevard One may be
the best of the best.
“I really think that Boule-
vard One, with its wonderful
streetscape, has the promise to be
the best part of Lowry,” Koontz
said.
The 8-acre parcel could accom-
modate uses such as a specialty
grocery store, restaurants, enter-
tainment and retail shops on the
first floor with offices and living
spaces above.
Buildings will be no higher
than five stories. To provide visu-
al interest and break up the scale,
building heights along First Ave-
nue will be limited to 45 feet (two
to three stories). Parking ratios
will be the same as the existing
Lowry Town Center.
“Zoning allows for up to
185,000 square feet, but I don’t
think it will be that big,” Koontz
said.
He said he wouldn’t be sur-
prised if the ultimate size will be
160,000 sf or even smaller.
“Just because the zoning allows
185,000 square feet, doesn't mean
that is what we will end up hav-
ing,” Koontz said.
It’s too early to say the size of
the largest tenant, he said.
“The LRA just announced that
we are the developer publicly, so
until now we haven’t been able
to do any premarketing or pre-
leasing,” he said.
In choosing tenants, he said
they will find restaurants and
retailers that will complement the
existing businesses at Lowry.
Lowry is a prized destination,
which will make it a magnet for
top retailers and restaurants, he
said.
“I’m guessing we will end up
with local and regional opera-
tions,” Koontz said. “I wouldn’t
think we would have a lot of
national tenants,” which could be
found in a typical suburban loca-
tion.
“I do think we will attract some
first-to-market retailers,” Koontz
said.
Also, he expects that there will
be for-sale condo units built on
top of ground-floor retail or offic-
es.
“Wewould either do the condos
ourselves or perhaps bring in a
developer that specializes in con-
dos,” he said.
In addition, because of its
venture with Embrey, the apart-
ment community that Embrey
will develop likely will have less
ground-floor retail than it might
have otherwise, he said.
“Our retail will be very walk-
able for residents who will live
there,” Koontz said.
Koontz has long wanted to
work with Embrey, since he first
visited its Quarry Village devel-
opment in San Antonio 10 or 11
years ago.
“QuarryVillage is built to a very
human scale and I think Boule-
vard One is also,” Koontz said.
“Ever since then, together with
Embrey, we’ve been looking for
the ideal place in Denver to build
an energetic village center where
people can shop, eat, live, work
and socialize. We found that in
Boulevard One,” he said.
The LEED Gold center will
serve all of Lowry and east Den-
ver neighborhoods.
“We’re going to build a high-
quality, highly connected, vibrant
people place at the heart of the
Boulevard One neighborhood,”
said Koontz.
“The mixed-use blocks will be
enhanced by imaginative parks
and plazas and the center itself
will be a place where people can
do many of their daily rounds
or enjoy a nice evening out,” he
added.
Kelmore and its design team
of MCG Architecture and Archi-
tecture Design Collaborative
will undertake site planning and
design review during the next six
months.
Construction will be underway
in 2017, with an opening tenta-
tively scheduled for late 2017.
s
A rendering of the mixed-use development planned at Boulevard One
at Lowry.
by John Rebchook
Sprouts made all of the differ-
ence.
An affiliate of Phillips Edison
Group recently paid $34.28 mil-
lion for the Sprouts-anchored,
144,000-square-foot FairfieldCom-
mons shopping center in Lake-
wood. Kensington Real Estate
Group was the seller.
California-based Kensington
had purchased the center at 98
Wadsworth Blvd. in 2007 for $22
million.
That equates to a 55.8 percent
return on Kensington’s initial
investment.
The sale price represented an
approximate 5.6 cap rate. Phillips
Edison paid $238 per sf for Fair-
field Commons.
Kensington Real Estate Group is
owned and operated by Pat Gal-
entine and Chris Hite, founding
principals of Coreland Cos., based
in SouthernCalifornia. Coreland is
one of Southern Californiaʼs lead-
ing commercial real estate service
firms.
“Our repositioning efforts at
Fairfield successfully converted a
value-add asset into a core asset,”
Galentine said.
“Fairfield was always a well-
positioned property that needed a
stable, daily needs anchor,” Galen-
tine continued.
The Sprouts Farmers Market
recently was built at Fairfield
Commons.
“We are very pleased that we
were able to build value by bring-
ing Sprouts on board,” Galentine
said.
Fairfield Commons was 40 per-
cent vacant whenKensington pur-
chased it.
Despite being positioned along
one of Denver’s major retail cor-
ridors, the center could not com-
pete with surrounding grocery-
anchored properties.
Kensington executed a major
renovation and expansion,
which included the addition of a
20,000-sf Planet Fitness and the
recent development of a 27,000-sf
Sprouts.
A total of 16,000 sf was demol-
ished to accommodate the recently
opened specialty grocer, which
ignited the re-tenanting efforts of
the remaining shop space upon
announcement.
Other tenants at Fairfield Com-
mons includeT.J.Maxx, Chili’s Bar
&Grill, Black-eyed Pea, Starbucks,
Rue 21, Red Wing Shoes and Citi
Financial.
Other News
n
The
Sherman Agency
recent-
ly bought a small strip shopping
center along West Colfax Avenue
for $2.4 million.
The sales price equates to $368
per square foot for the 6,518-sf
center at West Colfax Avenue and
Kipling Street.
The center is 100 percent leased
to three centers.
One of the tenants is theKolache
Factory.
“This was an off-market sale,”
said
Rob Edwards,
who handled
the transaction with
Tom Ething-
ton.
They are business partners
with theEdwards-EthingtonTeam
at
Pinnacle Real Estate Advisors.
Edwards said he approached
the owner to see if it would be
willing to sell.
The ShermanAgency, a Denver-
based, family owned real estate
investor since 1964, knows the
area well, he said.
“They were in a 1031 exchange
and this was the perfect opportu-
nity for them,” Edwards said.
In addition to Kolache, the cen-
ter’s tenants include Starbucks
and Cricket Mobile.
Kolache, a European pastry
shop, is the largest tenant in the
center with 3,218 sf. The other two
tenants are each 1,650 sf.
The ShermanAgency’s “interest
in the property spiked once they
discovered the Kolache Factory,
a successful and popular Eastern
European bakery specializing in
a warm, delicious, slightly sweet
fresh-baked pastry traditionally
filled with sausage, cheese or
fruit, had leased the vacant inline
space,” Edwards said.
Edwards said investors have a
great deal of interest in these small,
neighborhood centers.
“Kolache Factory had another
store in Lakewood that it closed
a couple of years ago, but it had
quite a following,” Edwards said.
“And, investors, of course,
always like a strong, credit-wor-
thynational brand like Starbucks.”
Edwards said.
“Cricket Mobile also is a strong
tenant,” he said.
This center also benefits from a
strong location at two busy streets,
Colfax and Kipling, he said.
“Some parts of Colfax are still
spotty, but this part of it is estab-
lishedand is close toaprettydense
residential area,” Edwards said.
“And you are not too far from
Colorado Mills with all of its
retail,” he said.
n
An unidentified buyer paid
$2.5 million, or $144 per sf, for
Waterford Plaza, a 17,325-sf, mul-
titenant retail center at 2683 E.
120thAve. in Thornton.
The building was constructed
in 2000.
Brandon Gouker
represented
the seller and
Josh Newell
rep-
resented the buyer in the transac-
tion.
Gouker and Newell are both
senior advisers at
Pinnacle Real
Estate Advisors.
n
Confluence Cos. LLC
paid
$2.2 million for a 10,200-sf retail
building constructed in 1982 at 215
Wilcox St. in Castle Rock.
Jesse Aguirre
was the seller.
Matt Call
and
John Witt
of
NavPoint Real Estate
handled the
transaction. NavPoint is based in
Castle Rock.
s
Sprouts anchors Fairfield Commons.
‘I really think
that Boulevard
One, with its
wonderful
streetscape, has
the promise to be
the best part
of Lowry.’
– Bob Koontz, Kelmore
Development
