Sales Price Distribution
September featured smaller deals, as institutional investors pause
Sales Price Per Square Foot Distribution
More than half the September deals priced over $200 PSF
September showed “normal” activity for local based buyers, as institutional buyers seemed to pause their activity in the region. Perhaps this reflects growing concerns over the general economy for the institutional buyers, while local buyers still need property to accommodate their growing business needs. Of the 66 recorded market deals in the Boulder,Larimer and Weld county area, only 5 were above $5 million in price. This is about half the recent monthly activity in the higher price ranges we have seen for the last few years. The majority of September NoCO CRE sales were local oriented deals.
Having said that, Graycliff Capital out of South Carolina did purchase the Johnstown Plaza apartments for $73 million. That calculated to $290,000 per unit over the 252 unit newly constructed property in fast growing Johnstown. This was by far the largest deal in NoCO in September.
PetDine, a Fort Collins based company purchased a newly constructed industrial facility on Diamond Valley rd. in Windsor for $11.1 million, or about $252 per square foot. The pet supplements maker has expanded operation several times over the last decade, and highlights the more localized activity in September.
The Sunbelt Rentals facility in southwest Weld county, in Brighton CO sold to an out of state investor for $9.1 million.This facility is situated on almost 13 acres, and the price per square foot for the 37,000 SF building amounted to $240 PSF. Seller is a local developer/business owner, and the buyer is from Philadelphia.
Namaste Solar is the major tenant in a flex property sale at the Gunbarrel Tech Center for $8.8 million. A Denver investor bought the fully leased property for $267 per square foot from a Connecticut equity fund group. Another flex property sale occured in Fort Collins as a 41,000 SF multi-tenant building sold on McMurry ave. for $7 million, to a Golden CO investor. The major tenant is Lincare. The sale was reportedly closed at a 7% cap rate. Investors are seeking higher yields (cap rates) than what the norm has been prior to recent Fed interest rate increases. This property may demonstrate the slight uptick in cap rates one might expect under current economic conditions.
The 33 unit 10th St. Flats in Loveland sold from a local owner to another Fort Collins CO based private investor for $6.67 million or $202,000 per unit. Investors remain confident in multi-family as rents continue to grow (albeit at a lesser rate than previous years). All units were two-bedroom apartments.
Another local buyer type that is active are growing churches in the smaller towns in NoCO. The Northern Ridge Baptist Church our of Erie CO purchased the former Interstate Ford dealership in Dacono CO for $4.6 million. This calculates to $189 PSF, for a facility with plenty of parking and good access. It had been on market for almost 4 years prior to this sale.
A land sale of note occured along the East Frontage road of I-25 in Frederick. There, a 3 acre commercial zoned parcel sold for $18 per square foot. The Denver based buyer paid $2.3 million for the property aimed for development. Similarly a 1.2 acre commercial lot on Grand Avenue in Berthoud CO sold to a Morrison CO buyer for $43 per square foot. The price was also close to $2.3 million. NoCO is growing, and entitled lots with infrastructure in place are in demand.