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May Talking Points ReportSpringtime CRE sales and leasing activity across the five metro areas (Boulder, Longmont, Loveland, Fort Collins, and Greeley), Showed great diversity and spreads across multiple property types. During May, at-least, the Buyers and Sellers were predominantly Colorado based, except for one mega-sale in Longmont. Activity has been on a strong run in a rolling twelve-month analysis, and this year is poised to be stronger than the five-year historical average during this post-Great-Recession era.

Leasing activity in the region last month showed the difference in Office leasing rates between the various metro areas.  Boulder featured the highest rates, naturally. Of note was an executed 9,600 SF lease at Boulder Commons in the Junction area which asked $28.00 PSF plus Operating Expenses (“NNN” or “Triple Nets”). That new-building rate was higher than existing buildings in Boulder, such as two office leases on Sterling Dr. in the Boulder Aspen Industrial Park. There, 23,000 SF and 15,500 SF spaces were separately leased with asking rates of $18.50 PSF NNN.

By contrast, the largest office lease in Fort Collins on Automation Dr. was for 15,000 SF with an ask of $13.50 PSF NNN. Niwot had a Flex building lease on Monarch Park St. that was for 10,500 SF with a $10.50 PSF NNN ask rate. Fort Collins had a larger 17,000 SF lease on the southern side of town off College. That retail showroom had asked $8.50 PSF NNN.

On the sales front, metro differences in the Tri-County are also easy to spot with last month’s activity. Local Colorado developer Schuman Companies sold a couple 22 unit multi-family properties on 28th St in Greeley to a Fort Collins Buyer for $100,000 per unit or $4.4 million total. Meanwhile, 25 unites in Boulder, The President John Adams student apartments sold for $7 million or $280,000 per unit to a local buyer. That Boulder property was built 51 years ago.  Seller was also from Boulder. Similarly, a newly built 34 unit apartment complex in Fort Collins directly across College Ave. from CSU, sold for $10 million, or $291,000 per unit, and at a reported 5% CAP rate. A Boulder buyer purchased that property.

On a larger deal size, Lakestar Properties out of Lakewood, New Jersey purchased a 547,000 SF multi-tenant property on Dry Creek Road in Longmont for $68.5 million or $125 PSF. Tenants included DigitalGlobe, Oracle and Front Range Orthopedic. The Chicago based seller had purchased the property for $30 million less in 2004. Showing some parity on a price per square foot basis, Schuman Companies also sold two fully leased industrial properties in Windsor for $8 million to a Longmont based Buyer. Schuman had developed and leased up the 59,000 SF of property prior to sale. This sale penciled out to $135 PSF.

For the record in terms of high price per square foot, look no further than BoulderRegency Center (a Florida REIT) added to its center which contains Whole Foods and diagonally across the street from Google. This former restaurant sold for $10 million, which translates to $1,500 PSF.  On the lower end of the price per square foot sales spectrum was a 84,500 SF industrial property which sold as a leased investment to a Denver buyer for $4.8 million or only $57 PSF.  The Seller still made out well in that deal, as they acquired the facility in 2013 for only $1.3 million. Major tenant at this location is Creative Foam Composite Systems.

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Net Absorption of Space Falling Steadily as Supply & Delivery Catch up to Market

Net Absorption Graph

Recent Sales Stats Stronger than 5-Year Post-Recession Era

Sales Stats