Flex/Industrial Investments and Residential Development Land Properties Highlight Activity in NoCO CRE

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30 trades above $1 million took place in the northern CO tri-county region in November, and the larger deals were in a couple popular property types as of late.

88 of our 720 regional Flex properties sold this year, almost a 12% velocity rate.  Investors increasingly are making Flex properties their desired product type, especially given the increasing presence of credit tenants occupying these properties.

A San Mateo CA investment fund exemplified the demand for the industrial/flex product in our NoCO region with a $30.3 million purchase of a 161,000 SF property in Louisville CO.  The property had multiple tech, bio-tech and food industry tenants, but was only 60% occupied at time of sale.  Therefore the cap rate at time of sale was only 1%, and the investors are obviously looking to add value by leasing the remainder of the property. The Centennial Valley Business Park property traded at approximately $187 PSF and was the largest sale in the month of November in our region.

Another CA based investment group, Berkley Partners out of San Francisco added to their industrial holdings in the area with the $9.8 million purchase of a 23,000 SF Flex property.  The property was leased to a technology company and traded at $426 PSF.  The newer property is located in the Gunbarrel region of Boulder.

Of further interest was the $2.1 million purchase of a single tenant property occupied by Integrated Water Services in the Valley 66 development in Mead CO.  The Flex-Industrial property sold to a private investor at a reported 6.5% cap rate and $284 PSF. The Tenant’s lease was of “triple-net” form, which is attractive to investors in limiting operational cost risks.

Another regional industrial property investment was seen by the sale of a $3.5 million, 10,336 SF warehouse on 49th St. in Boulder.  The Firestone CO private investor bought the property fully leased with two construction industry tenants occupying the facility.

Meritage Homes is an active homebuilder in the NoCO region, and they purchased just over 92 acres of land at Poudre Heights in Windsor CO for $11.3 million, or $3 PSF. Though slated for single family homes, the land was “raw”, with no infrastructure in place.  Initial planning calls for almost 400 homesites, with both single family and townhomes to be built.  Poudre Heights in is the Water Valley neighborhood of Windsor.

The strong demand for residential land also showed up in another 294 acre land parcel sale last month in Windsor again at the Tacincala development. This $10 million deal ($1 PSF) will accommodate 574 homesites, but is also sold as “raw” land prior to full entitlement and development of infrastructure. Non-potable water shares made up a significant value as part of this sale.

Rounding out the top 5 sales in the tri-county region was the $8.1 sale of the Hampton Inn in Greeley CO to a Denver metro based hotel operator.  The sale calculates to about $109,000 per “key” or room.  Fort Collins based Spirit Hospitality sold the 74 unit property to the Buyer.

December usually brings a rush of deals to close out the year, and it is anticipated this year will bring the same.


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