Colorado Real Estate Journal - March 16, 2016
Sprouts made all of the difference. An affiliate of Phillips Edison Group recently paid $34.28 million for the Sprouts-anchored, 144,000-square-foot Fairfield Commons shopping center in Lakewood. 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 Fairfield Commons. Kensington Real Estate Group is owned and operated by Pat Galentine and Chris Hite, founding principals of Coreland Cos., based in Southern California. Coreland is one of Southern California's leading 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,” Galentine continued. The Sprouts Farmers Market recently was built at Fairfield Commons. “We are very pleased that we were able to build value by bringing Sprouts on board,” Galentine said. Fairfield Commons was 40 percent vacant when Kensington purchased it. Despite being positioned along one of Denver’s major retail corridors, the center could not compete 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 demolished to accommodate the recently opened specialty grocer, which ignited the re-tenanting efforts of the remaining shop space upon announcement. Other tenants at Fairfield Commons include T.J. Maxx, Chili’s Bar & Grill, Black-eyed Pea, Starbucks, Rue 21, Red Wing Shoes and Citi Financial. Other News The Sherman Agency recently 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 the Kolache Factory. “This was an off-market sale,” said Rob Edwards, who handled the transaction with Tom Ethington. They are business partners with the Edwards-Ethington Team at Pinnacle Real Estate Advisors. Edwards said he approached the owner to see if it would be willing to sell. The Sherman Agency, 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 opportunity for them,” Edwards said. In addition to Kolache, the center’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 Sherman Agency’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-worthy national 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 established and is close to a pretty dense residential area,” Edwards said. “And you are not too far from Colorado Mills with all of its retail,” he said. An unidentified buyer paid $2.5 million, or $144 per sf, for Waterford Plaza, a 17,325-sf, multitenant retail center at 2683 E. 120th Ave. in Thornton. The building was constructed in 2000. Brandon Gouker represented the seller and Josh Newell represented the buyer in the transaction. Gouker and Newell are both senior advisers at Pinnacle Real Estate Advisors. 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.