Colorado Real Estate Journal - May 4, 2016
Lakewood-based investors picked up a rare value-add deal with the recent $7.95 million acquisition of Mineral Business Center and Lincoln Business Center in Littleton. The deal is the sixth syndication put together by brothers Bill and Charlie Johnson of WC Johnson, a brokerage and management company. The neighboring flex buildings are located off South Broadway and East Mineral Avenue in Littleton. They were 74 percent occupied at the time of the sale. “We’re optimistic we’ll be able to increase occupancy there dramatically” with in-house leasing and management, said Bill Johnson. The new owners plan to correct deferred maintenance, improve the landscaping at the Mineral building and focus on leasing up the properties, including approximately 10,000 square feet of mostly vacant walk-up office space at Lincoln Business Center. The buildings were real estate owned for six years. Center Colorado LLC, which is affiliated with RAIT Financial Trust, was the seller. Lincoln Business Center is a 56,631-sf building at 8000 S. Lincoln St. that was constructed in 1981. It consists of office, retail and warehouse space. Located next to Littleton Adventist Hospital, it has signage on Lincoln. Mineral Business Center, built in 1982, consists of 58,800 sf of office/flex/warehouse space with drive-in and dock high loading. The acquisition included a 250-stall parking structure. The parking ratios for the two buildings range from 4:1,000 to 4.28:1,000. Acquired at a significant discount to replacement cost, approximately $68 per sf, the two buildings occupy a “great location” that attracts a wide variety of tenants, said Johnson. “It’s an interesting tenant mix, particularly in the Lincoln building,” he said. About two-thirds of the units in that building are occupied by fitness or destination retail tenants, including a diver training facility, fencing facility and Jungle Quest, a kids adventure center with rock climbing, zip lines and rope bridges. T.J. Smith and Cody Sheesley of Colliers International represented the seller in the transaction. Bill and Charlie Johnson founded WC Johnson to expand their family’s real estate holdings into Colorado. “We try to identify opportunities that have some reasonable scale,” Bill Johnson said, noting they have syndicated deals in Colorado since 2012. None of their deals is contingent on raising outside equity. Instead, they set a minimum sponsor contribution, which is typically substantially more than most sponsors, and offer the balance to a small group of investors, Johnson said. “We have a long-term investment focus,” he said. Among their holdings are two other flex projects in the Denver area, mixed-use projects in Fort Collins and Winter Park, and a retail center in Golden.