Colorado Real Estate Journal - September 3, 2014
A Denver group bought twothirds of a “nice” but nearly vacant Fort Collins office building with the intent of adding function – and tenants. NexGen Riverbend Holdings LLC, which is affiliated with NexGen Properties, paid $1.55 million cash for 14,400 square feet of the building at 2121 Midpoint Drive. The space comprises half of the first and third floors, along with the second floor, which was built out as executive suites with 25 offices. The space is 93 percent vacant. The entire building was condominiumized, but the owners’ association never was actuated. The owners plan to either modify or dissolve the association and create a multitenant, for lease office building, said Sean Sjodin, NexGen director of acquisitions. The second floor will be divided into either two or four sections for 2,000- to 4,000-sf tenants. “The quality of construction is fantastic. It’s A, B-plus product in that market,” said Sjodin. “It’s really nicely finished out inside. It’s a very nice building,” added Randy Marshall of Sperry Van Ness/The Group Commercial, who handled both sides of the transaction. “Their plan is to go in and invest some money into redoing each of the spaces they own and making those much more functional for leasing. “This is right in their wheelhouse as far as what they want to buy. They want to buy distressed properties in which they can add value and put some improvements in and lease it up.” The 21,600-sf building is located at Timberline and Prospect roads, and was a product of the recession, Marshall said. It ended up in the hands of two banks: Carlisle Capital LLC, which sold its share – including a vacant lot at 2133 Midpoint – to NexGen, and Guaranty Bank. The buyer is negotiating with Guaranty Bank to buy its portion of the building, which is 100 percent vacant. “We’re still in negotiation on a price but hopeful that we will move forward,” said Sjodin. “We obviously like the Fort Collins market. We think there is a lot of opportunity there,” he said. Given the building’s quality, ease of access to Interstate 25 and the general improvement in the Fort Collins Class A/Bplus office market, “I think we have a great value-add opportunity here,” said Sjodin.