Price Per Square Foot Doesn't Tell Full Story of Sales Volume Increase
When properties sold for about $100 PSF in 2010, we were only selling about $750M. Last year at $160 PSF, we sold over $2 B. While this represents a 60% increase in price PSF over this decade, total sales volume rose and impressive 260%
Cap rates hold steady at 6.5% range
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Lodging properties continued their prominence in sold deals for the month of August in our tri-county northern Colorado district. Topping off the charts was the Marriott Courtyard in Louisville. This 154 room hotel sold for $16 million as part of a portfolio deal acquired by a Chicago based equity company. They also picked up the Residence Inn in Louisville. This is an 88 room property which had $9 million allocated to its sale. Unrelated to the portfolio sale, the Super 8 motel in Greeley sold for $3.8 million. An individual investor from Arizona bought the property for about $78,000 per key. Finally, the Wild Basin Lodge in Allenspark sold for $3.5 million or almost $390,000 per key. A Colorado individual investor bought this mountain lodge property.
A two building sales-leaseback arrangement was made for two Boulder properties to a Connecticut firm, with MKS Instruments staying on as a tenant. Combined, the sales price was about $8.8 million for 47,000 SF of buildings, or a PSF price of about $190. The sales-leaseback provision provided capital to the Tenant (former owner), while providing an income stream from rents to the buying entity.
On the apartment side, 24 units on Crittendon st. in Wellington sold for $5 million to a local investor. Reported cap rate was 6.42%, and price per room was about $208,000. A 44 unit apartment on 15th St. in Greeley sold to a major apartment operator in Greeley as well. This property sold for $4.8 million, $108,000 per unit, and a reported 5% cap rate. A 24 unit apartment on Shields st. near CSU sold to another Colorado buyer at $4.6 million, a reported 5.5% cap rate, and $192,000 per unit. Colorado buyers seem most active for properties under 50 units.
Rounding out the month in other property types: A 4 property office portfolio in Fort Collins at Horsetooth and Shields streets, sold for $8.85 million to a local developer/investor, Alex Schuman. With current occupancy, the 60,000 SF property’s sale cap rate was reported at 5.5%.
A 3 adjacent commercial condominium sale featured in downtown Boulder at 9th and Pearl. The street front property had been used for offices thus far. It sold for $2.7 million to an entity related to locally prominent developer/owner Bill Reynolds.
Two single tenant net lease sales of note: Greeley’s Family Dollar store on 22nd st. sold for a 6.15% cap rate, or $1.8 million. An individual trust bought the property. Also, Buffalo Wild Wings in Centerra business park in Loveland, sold to a local individual investor for $1.7 million, or almost $300 PSF.