Colorado Real Estate Journal - September 6, 2017
A real estate investment and asset management company made its Colorado Springs debut with its record-setting acquisition of Commons at Briargate. New York City-based Rivendell Global Real Estate paid $44.5 million, or $229,381 per unit, for the Commons at Briargate – the highest price per unit ever recorded regardless of vintage for the sale of a Colorado Springs apartment community. “The record-setting sale of Commons at Briargate not only illustrates the strength of the market but also the uniqueness of the asset and its location,” said ARA Newmark’s Kevin McKenna. “The property is one of a kind in the Colorado Springs market because each unit boasts a direct-access garage – a feature not present in any other multihousing asset – and renovations have been made throughout 80 percent of the units with finishes comparable to those in new product. “The property is commanding some of the highest rents in the city and will continue to have an exceptional advantage,” he continued, noting the Southern Colorado city is ranked as one of the top five cities in the United States in terms of rent growth. “Competitive interest in the property led to 15 offers. Most top bidders were new to the market, drawn to strong market fundamentals, increased employment growth, limited product and nationally ranked rent growth.” McKenna and ARA Newmark’s Saul Levy represented partners Lyon Living, a residential development company, and Barings Real Estate Advisers, part of Barings LLC, a global financial service firm acting on behalf of an institutional investor, in the sale of the 194-unit asset. Located at 2845 Freewood Point, Commons at Briargate has an irreplaceable location within minutes of major medical development, prominent employers and highend retail, added McKenna. Commons at Briargate is adjacent to the 2 million-square-foot Briargate Business Campus, which is home to tenants such as USAA, Kaiser Permanente and T. Rowe Price, less than five minutes from The Promenade Shops at Briargate, which features retailers such as Apple, Pottery Barn and Williams Sonoma, and is near both St. Francis Medical Center and Memorial Hospital, both of which have $100 million projects/expansions underway. In addition to direct-access garages, the community, constructed in 1996, boasts “condo-quality” floor plans that average more than 1,000 square feet, 9-foot ceilings, full-size side-by-side washers and dryers, granite or quartz countertops and wood-burning fireplaces. Rivendell is anticipated to renovate the balance of the units as well as extend the pool deck. Earlier this year, Rivendell completed the $600,000 per unit acquisition of 17*Walnut, a 26-unit community in Boulder’s East End. The price represented the highest price ever paid per unit for a conventional apartment community in Colorado. Rivendell also owns The Hub, an 83-unit community in Boulder. Other News A stabilized office building in Colorado Springs sold for $1.84 million to a buyer planning a few upgrades. Sunburst Capital LLC paid nearly $94 per square foot for Cascade Professional Building, a 19,583-sf office property at 625 N. Cascade Ave. Cascade Investments LLC sold the building, constructed in 1977. “This is a bittersweet moment for me. This was my first property listing as a broker, and I have worked with the building owner since 1986,” said Ted T. Link of Cascade Commercial Group, who listed the property with Cascade’s David H. Schroeder II. Link noted the building has a long history of tenant retention, including three tenants that have occupied space at Cascade Professional Building for more than 20 years. The building was 86 percent occupied at the time of sale and is anchored by Heuser & Heuser Law Group, which has occupied space there since 1997. “The buyer got a very stabilized asset. The building has kept a high level of occupancy and has fantastic tenants,” added Schroeder. Sunburst, represented by Taylor Stamp of Quantum Commercial Group Inc., plans to make a few upgrades to the building. Cascade Commercial will continue to market the two remaining office vacancies at the property. A 25,600-sf industrial building at 2545 and 2555 Carmel Drive in Colorado Springs recently traded hands. A-1 Freeman Hill Country LP purchased the building from Exchange Services LLC for $2.13 million. Aaron Horn of Colorado Springs Commercial, a Cushman & Wakefield Alliance represented the seller. Greystone Unique Apartment Group, the multifamily division of Unique Properties Inc., recently brokered the sale of Red Rocks Terrace Apartments. The 23-unit multifamily property, located at 3164 W. Colorado Ave. in Colorado Springs, sold for $1.75 million, or $75,869 per unit. Constructed in 1972, the property comprises a mix of three studios, 16 one-bedroom units and four two-bedroom units. Red Rock Terrace LLC purchased the community, which it plans to renovate and hold long term for future cash flow. CRBCS LLC sold Red Rocks Terrace, which is located minutes from Garden of the Gods and downtown Colorado Springs. A mobile home park portfolio in Cañon City recently sold. The property at 2431-2433 Central Ave. includes 21 spaces and mobile units, two single-family homes and a warehouse. It sold for $1.08 million. The park at 818 Ponderosa Lane comprises nine spaces and mobile home units and a single-family home. It sold for $325,000. Brent Hubbell and Josh Newell of Pinnacle Real Estate Advisors LLC represented the unnamed seller in the transaction. “After purchasing the property out of foreclosure a few years ago, the seller decided to sell and capitalize on current market conditions. The property was very attractive to the buyer due to its cash flow and price per unit,” stated Hubbell. A Colorado Springs office property was picked up by LWG Enterprises LLLP for $1.09 million. The 26,435-sf building at 4020 Palmer Park Blvd. was sold by Jim and Marlis Egbert. Gary Hollenbeck of Palmer McAllister, and Mary Frances Cowan and Russell Stroud of Quantum Commercial Group Inc. listed the office property. Lester Colodny of NAI Highland represented the buyer. Northrop Grumman Systems Corp. recently renewed its 124,305-sf lease in Colorado Springs at 3535 Northrop Grumman Point. CV Patriot Springs 3535 LLC is the landlord, represented in the renewal by Peter Scoville and Greg Phaneuf of Colorado Springs Commercial, a Cushman & Wakefield Alliance. CBRE represented the tenant. Drexler Law Group inked a 5,500-sf lease at the Conover Building, located at 24 S. Weber St. in Colorado Springs. Ted T. Link and David H. Schroeder II of Cascade Commercial Group represented the tenant in the transaction. Landlord Conover Realty & Investments was represented by Mary Frances Cowan and Russell Stroud of Quantum Commercial Group Inc. Drexler Law Group will occupy the space by year-end. Colorado Springs Commercial, a Cushman & Wakefield Alliance recently released its report on Colorado Springs’ Class A/B office market, in which it noted the first half of 2017 saw the continued improvement in the market with overall vacancy dipping to 15.63 percent, down from 17.8 percent at the start of the year. The report noted that vacancy declined across all submarkets and, while the market waits for a substantial new requirement to take down one of the 100,000-sf blocks of vacancy that continues to inflate the overall vacancy, the level of activity suggests that the vacancy rate will continue to drop steadily in the second half of 2017. Colorado Springs Commercial also noted that with the overall improving market, most properties are pushing lease rates up. The central business district market is pushing $20 per sf triple net and higher-quality suburban product is at $17. The firm anticipates the overall average to increase through the year and provide impetus for new construction in 2018. Additionally, the report noted that absorption has been strong year to date and will continue through year-end, and for the first time in many years tenants are having a hard time finding quality space.