June 1-June 14, 2016 —
COLORADO REAL ESTATE JOURNAL
— Page 15
Industrial/Self-Storage
The company focuses on offer-
ing modern, cost-efficient facili-
ties with special attention to
customer service.
Located at a highly trafficked
intersection, the $11 million
StorQuest at Sixth and Kala-
math has 220,000 people within
three miles. The DTC property,
an approximately $14 million
development, also occupies a
very visible
site in a mar-
ket with high
barriers
to
entry.
“This land
wasn’t inex-
pensive by
any means,
but it definite-
ly pencils for
us,” Suddarth
said of the tech center property.
The 1.7-acre site sold for $2.9
million, or $39 per square foot.
The William Warren Group
plans to start construction of
two additional facilities in the
Denver area, one with ground-
level retail, by the end of the
summer.
Nationally, the company has
71,000 units and is building
another 6,600.
While its typical pro forma
for a new facility calls for a
36-month lease-up, the newest
StorQuest in the Denver area, a
634-unit conversion of a former
manufacturing plant at Inter-
state 25 and East Evans Avenue,
leased up in 11 months, accord-
ing to Suddarth. In that area,
“There’s quite a bit of supply,
but it’s all older supply,” he
said.
According to Suddarth, 10
percent of the population has a
self-storage unit, with the pre-
ponderance of demand coming
from residents of single-family
homes. During the recession,
few new projects were built,
creating a pent-up demand;
however, development has
been ramping up with twice as
many projects under construc-
tion or in entitlements than two
years ago.
Dcb Construction Co. is the
design-builder for the Stor-
Quest facilities.
The William Warren Group
it is a privately held national
company that acquires, devel-
ops and operates self-storage
assets in major U.S. markets.
The Costa Mesa, California,
company is developing new
properties in Denver, Los
Angeles, New York, Portland,
Seattle and Phoenix.
s
StorQuest
A 910-unit StorQuest is being constructed in the heart of the Denver Tech Center.
Park has good access to E-470,
it’s also acces-
sible without
having
to
use the toll
way, noted
Brad Cush-
ard, a part-
ner in Cen-
tral Devel-
opment. In
a d d i t i o n ,
the business
park has a use tax exemption
for approximately seven years,
which represents a cost savings
to companies locating there.
It also offers yard space,
which industrial users are find-
ing increasingly rare in the Den-
ver metro area.
Central Development is
under contract to buy the site
and expects to close on the land
in July.
Kittie Hook
and
Wade
F l e t c h e r
of
New-
mark Grubb
Knight Frank
represent the
partnership
that is sell-
ing the prop-
erty. They’re
also market-
ing build-to-suit opportunities
within the park and the spec
building, which will have 25- to
27-foot ceiling height. Central
Development intends to break
ground in September and deliv-
er the building in summer 2017.
According to NGKF, the
vacancy rate for industrial/
warehouse space in the south-
east industrial submarket is
3.94 percent, and research-and-
development/flex space has
7.77 percent vacancy. There are
four
exist-
ing buildings
in the mar-
ket, that can
a c c o mm o -
date a user
that requires
20,000 sf or
more
and
24-foot
or
higher ceil-
ings, but all
four are 15 or more years old,
said Fletcher, citing CoStar data.
Beyond that, there is one pro-
posed building and two under
construction that also could
potentially fit that requirement,
he said.
With vacancies so tight, users
are having to compromise on
their space requirements. “What
we’re offering is to get a build-
ing up and ready so somebody
doesn’t have to compromise,”
said Records.
Hook said the business park
already is generating a surpris-
ing amount of activity from
users that want space quickly.
It has interest from companies
ranging from 15,000 to 150,000
sf. “It’s a tremendous mix of
people we’re talking to for the
site,” added Cushard.
The speculative building will
be divisible to 15,000 sf and will
feature dock-high and drive-in
loading. The high ceilings allow
for two-story office build-out,
higher racking than typically is
available in the submarket and
cranes. The building is being
designed by Intergroup Archi-
tects, which was recognized
nationally within the concrete
tilt-up industry for its work on
another southeast Denver Cen-
tral Development project.
A total of 13 sites for buildings
ranging from 14,000 to 150,000
sf have been delineated with-
in Encompass Business Park,
but they can be modified with
administrative approval by
the city of Centennial. “This is
already zoned, entitled, every-
thing is platted, ready to go,”
Hook commented.
“We can accommodate almost
any use,” added Records. “We
like the zoning and being in the
city of Centennial. The entitle-
ment process is very straightfor-
ward and fast track.”
Central Development is a
regional, family owned devel-
opment company that has
developed three buildings
totaling approximately 300,000
sf worth an estimated $33 mil-
lion in the southeast industrial
submarket over the past five
years. It also recently completed
a 70,000-sf warehouse/distri-
bution facility for Samuel, Son
& Co. in Adams County and
will break ground in July on an
approximately 20,000-sf build-
ing for Interstate Electrical in
Arvada. The company also will
break ground in September on
56 townhomes along the South
Platte River in Littleton.
s
Central
as the expertise of Resources Real
Estate and the cost basis” of the
purchase price for the two prop-
erties, he said.
The insurance company also
“liked the fact that Resource plans
to spend a significant amount on
capital improvements for both
assets,” Tupler said.
While the communities are at
the opposite ends of the metro
area, they are similar to each other
in that they have a value-add
component, he said.
Investors like having a value-
add component, as their return
on the investments greatly out-
performs returns on the acquisi-
tion.
“They are going to bring both
properties up to a new standard,”
Tupler said.
The lender had been active in
making loans in the Denver area
in the past, “but in more recent
years has been underexposed in
Denver,” Tupler said.
While not naming the lender,
that is an apt description of All-
state.
That may change, however.
“They are very interested in
doing more loans in Denver,”
Tupler said.
s
HFF
Shown is Fox Ridge, which also was refinanced in a deal arranged
by Tupler.
Brad Cushard
Kittie Hook
Wade Fletcher
Jon Suddarth
