Colorado Real Estate Journal - November 19, 2014
Trammell Crow Co. will begin building new, highly anticipated industrial product next summer on a formerly tainted site in central Denver. EnviroFinance Group has agreed to sell approximately 77 acres near Interstates 25 and 70 to Trammell Crow for construction of Crossroads Commerce Park at Globeville. The master-planned business park eventually could provide up to 1 million square feet of distribution, warehouse, manufacturing and related product, and will create a significant number of jobs on a site that once housed the largest employer in that part of the city. ASARCO’s Globe Plant operated on the property, located at the corner of East 55st Avenue and Washington Street in Denver and Adams County, until 2006. EnviroFinance has spent the last four years working with a trust created out of ASARCO’s bankruptcy to clean up the site for redevelopment. The $15 million effort was financed with U.S. Department of Housing and Urban Development loans through Adams County, monies from the trust, EnviroFinance Group’s own equity, and various other loans and grants. “We’ve worked with agencies at the federal and state level, as well as Adams County, the city of Denver and community stakeholders for many years to bring this property to this point. We’re very excited to partner with TCC to move this project forward into the vertical phase of development,” said Stuart Miner, president of EFG and its affiliated companies. Globeville I will complete preliminary development prior to the sale to Trammell Crow. “To get to the point where the cleanup is within sight and infrastructure is underway is really a remarkable moment, not only for us, but for the agencies like the Colorado Department of Public Health and Environment, EPA, Adams County Economic Development, the Denver Office of Economic Development and Denver Urban Renewal Authority that have participated and helped us all along the way,” added EnviroFinance Group’s Cameron Bertron. The first phase of development will include three to four speculative buildings from about 75,000 to 375,000 sf, to be built in phases. Trammell Crow also is working with a user for an approximately 60,000-sf build-to-suit and has sites for 60,000- to 70,000-sf buildings that could bring the first phase to more than 800,000 sf. Crossroads Commerce Park will include cross-dock buildings with 32-foot clear height; front-park, rear-load buildings with 24- to 32-foot ceilings; and smaller (30,000- to 50,000-sf) build-to-suit opportunities. “We think it will be highly sought after,” said Bill Mosher, senior managing director of Trammell Crow Co.’s Denver Business Unit. “There has been no new product in this central market for so long. It’s a market that’s been fully leased with no new supply.” “That market is starved for new product,” said Tim D’Angelo of Newmark Grubb Knight Frank, who will market the business park for Trammell Crow with NGKF’s Mike Wafer. Of the 32 million sf of industrial product in the central Denver submarket, only 1 million has been built since 2000, “and of that product, the vacancy is zero,” D’Angelo said. “We’re really excited about this for that reason.” As Denver has grown, properties once used for warehousing and manufacturing have transformed into apartments, office buildings and retail. That has pushed much of the industrial product away from the city core. “I’ve kind of worried about Denver pushing its industrial job base to the periphery and into the suburbs,” said Mosher. “I think it’s really important to maintain a sector of the city that creates job base.” “It will put hundreds if not thousands of people back to work where these jobs are critical. It’s a nice completion of the circle given that this site was once the largest employer in that part of town,” Bertron added. Mosher said Trammell Crow had been looking for a development site along the I-70 corridor since completing the 818,000-sf Airways Business Center at I-70 and Airport Road in partnership with Principal Real Estate Investors in 2009. “It’s hard to find properties, and when we did find them, we weren’t able to acquire them,” he said, adding Trammell Crow approached EnviroFinance at the right time to be able to capitalize on the opportunity. From an industrial standpoint, Crossroads Commerce Park literally is at “Main and Main,” he said. “I can’t imagine a site that’s more central than that.” Trammell Crow has developed more than $2 billion in industrial, office, residential, health care and public-private projects along the Front Range over the last decade. The ASARCO site was a smelter for gold and silver ore in the late 1880s. Around the turn of the century, it was converted to a lead production facility. ASARCO produced arsenic trioxide for insecticides, medicines and glass from 1919 to 1926, and was producing cadmium for protective coatings for iron and steel when the plant closed in 2006, according to the U.S. Environmental Protection Agency. “To put this property back into productive use is a oncein-a-generation opportunity for Adams County and Denver,” said Barry Gore, president and CEO of Adams County Economic Development. Wafer, who has been involved with the site over the last 15 years, said with EnviroFinance Group completing remediation and Trammell Crow ready to step in during a very strong period in the industrial real estate cycle, “It’s kind of the perfect storm of everything all coming together at once.” “It’s extremely exciting,” he said