NoCO rent growth slowing
NoCO market cap rates rising, but still within mid-point of last 10 years
Outside of one multi-family deal that felt like “old times”, June #NoCOCRE sales were across a variety of property types and dominated by owner-occupier and remodel type projects.
The “old times” multi-family deal was San Francisco, California based Hamilton-Zanze expanding its NoCO footprint by acquiring the Greens at Van de Water complex in Loveland from national equity group Blackstone out of New York. The 252 unit complex sold for $75.1 million, or almost $300,000 per unit. Cap rate was reported at 4.8% which is lower than other similar trades. Part of the purchase ‘premium’ was the assumption of a loan for $36 million by the Buyer. The assumed loan originated in 2019 at favorable interest rates versus today’s higher rate options for acquisition debt capital. This certainly helps explain the relatively low cap rate by today’s standards as the debt costs are below the yield of the property.
The next largest regional sale in June was a portfolio of two former retail properties called Loveland Yards. These former outlet mall properties were sold to local developer Schuman Companies for $12.3 million by the Canadian firm that owned the properties prior. ~160,000 square feet of retail property sold for about $76 per square foot. Schuman is converting the property into a mixed use center, which will feature commercial condominiums for sale. Many of the units are already under contract by potential occupants. The highly visible location along I-25 and Highway 34 helps drive the redevelopment vision of the Buyer and attract new condominium buyers to the project.
A Littleton CO hotel operator bought the 112 key Courtyard Hotel in Fort Collins for $8 million, or about $71,000 per room. The property has traded multiple times over the last two years. Seller was a group out of Oklahoma.
Louisville CO property Parkway Tech Center I sold for $7.75 million, or almost $200 PSF. Sellers were Boulder based, and the Buyer is an investment group out of Sacramento CA. The 39,500 SF property is occupied by several tenants and the property type is flex/R&D.
City Lights Church in Greeley purchased a 48,000 SF warehouse with intent to convert it into a large church facility. The property sold for $5.5 million or about $114 psf. The building was sold vacant. Banner Health had occupied it previously and the building contained substantial office type finishes. Seller was out of Washington state.
Greeley was also the location of a three tenant strip retail sale for $3.5 million, or $615 PSF. Tenants include Jimmy John’s restaurant and T-Mobile. Buyer is from Virginia Beach VA, and Seller was from the Denver area.
A Mead CO sale featured a local Colorado transaction as the Total Concrete (from Longmont) sold the flex/office building to Solid Concrete in Mead. Transaction price was $223 PSF or $3.2 million total.
The new style “tunnel” car washes are popular amongst investors and operators, and the Tidal Wave car wash center in Fort Collins was sold in June to a Parker CO group for $3,075,000. The New Jersey sellers had owned the center since 2019 and doubled their acquisition price of about $1.5 million with this sale. The price per square foot is almost $860, reflecting the investment value of the business as much as the real estate itself.
Finally, a 33 unit mobile home park (Aspen MHP) in Fort Collins sold for $2.9 million, at a calculated cap rate of almost 7%. The land value of the sale was $25 PSF. Mobile home parks are rare in NoCO, and high occupancies are very common in this product type.