Colorado Real Estate Journal - February 18, 2015
Denver-based Quiat Cos., which quietly has been investing in real estate and oil and gas properties for more than 50 years, recently paid $2.45 million for the Westminster Gateway property at 10309 Reed St., at the intersection of U.S. 36 and Church Road in Westminster. Although the sales price isn’t huge, the 100 percent leased, newly opened Westminster Gateway has only 5,000 square feet. In other words, Westminster Gateway sold for $490 per sf. “Honestly, I don’t know if that was a record price per square foot,” said Chris Wiedenmayer, who handled both sides of the transaction with fellow Legend Investment Group brokers Sam Zaitz and Kyle Underwood. “I can tell you it is one of the highest price-per-square-foot deals in that area,” Wiedenmayer said. He said Westminster Gateway is a perfect example of the type of deals that are drawing investors that want a steady income, as opposed to a valueadd opportunity. “The way the market is now, these kinds of deals are selling at historically high prices per square foot and at low cap rates,” Wiedenmayer said. “Investors of triple net deals are looking for long-term secu rity,” Wiedenmayer said. “That is why they are willing to buy at lower cap rates than they historically have.” Legend Investment Group helped the seller, Brad Brooks of Sidford Capital, to put together the deal. Legend Investment found the land and brought two national tenants, Mattress Firm and Mike’s Sub, to the site The two tenants occupy the entire development. Zaitz brought Mattress Firm and Adam Rubenstein of Legend, represented Mike’s Sub. Mattress Firm takes 3,500 sf and Jersey Mike’s Subs has 1,500 sf. “There were a significant amount of buyers interested in this,” Wiedenmayer said. “We received multiple offers,” he said. Prospective buyers, he said, liked that the two tenants have long-term leases, it’s a brandnew center and its proximity to the former Westminster Mall that is being redeveloped. Demographics around the area, especially within a onemile radius, are extremely strong. There are 7,622 households within a mile radius with an average income of $93,898, according to Legend’s research. There also are 249 businesses within a mile radius and 3,106 businesses within a three-mile radius. Quiat bought it to diversify its holdings, he said. Typically, he said buyers that want these types of stable properties aren’t also shopping for value-add deals. “The value-add guys don’t mind getting their hands dirty,” Wiedenmayer said, in exchange for the possibility of higher returns. “This is really a turnkey operation,” Wiedenmayer said. “You buy it and there is nothing to worry about,” he said. John Winslow, principal of Winslow Property Consultants LLC, who was not involved in the deal, echoed Wiedenmayer’s assessment of why investors are drawn to assets such as Westminster Gateway. “I think it is certainly one of the highest prices per square foot paid,” Winslow said. He said cap rates are typically lower with high-quality buildings, tenants and locations, such as found at Westminster Gateway. Records show that the seller paid $735,000 for the land in August 2013 from Resolute Investments, headed by Gary Rohr. The land sales price equates to $23.22 per sf. “Not only is the developer making a great return on their investment, this type of retail investment has become one of the key investments for retail shopping center buyers,” Winslow said. “The risk for the developer and the new buyer is marginal as the market has been established in this area,” Winslow said. “These deals don't stay on the market too long,” he said.