Pulling out of the Negative Drag on CRE Sales Volume in NoCO
Sales volume from Q4 2020 was finally catching up to “normal” 2019 levels , after a precipitous drop through most of 2020
The three Northern Colorado counties (Larimer, Weld, & Boulder) were a bit slower than usual during last month in terms of activity. However, we still had some significant deals that provide some good Talking Points!
Leading the way was the $30.6 million sale of the 116,000 SF Advance Energy campus in Fort Collins to Capital Square. The VA entity paid $265 PSF for this sale-leaseback deal. The Seller, Cress Capital, was no stranger to NoCO CRE, and has had a large footprint in similar office parks.
As might be predicted, multi-family properties are still quite attractive to investors. The Buttes, a 111 unit apartment complex in Loveland, sold to Woodspear Properties of Denver for almost $230,000 per unit. Total sale was $25.5 million. A Longmont property, with 136 mobile homes, sold for $20.5 million. The St. Vrain Mobile Home Community sold for about $140,000 per unit to Park Management, Inc. from Arizona. On a smaller scale, 1602-1620 Walnut in downtown Boulder sold for $6.2 million to a Denver area investor. The Victorian style five building offering included 21 units, which calculates to a $295,000 per unit selling price. At reported net income, the property traded at a 4.6% cap rate.
The flex industrial oriented Longmont Business Park was sold for $13.16 million. This property is approximately 196,000 SF, so the trade calculated to about $67 PSF, which is well below replacement cost. Ivy Realty out of Connecticut snapped this property up. Fort Collins featured the next highest industrial sale as 901 Smithfield, a 12,000 SF warehouse property traded for $183 PSF, or $2.2 million to a local Buyer.
As a sign of how the Covid economy has changed the use of real estate, the former Loveland Pizza Ranch sold to a dermatology clinic for $2.15 million, or $352 PSF. The clinic will need significant renovation to convert from restaurant to medical clinic, but the location right off busy Highway 34 in east Loveland, and the free-standing building offering sufficient on-site parking was attractive to the Buyer.
Also in Fort Collins, a retail property at 1654 N. College traded at $162 PSF to a Cheyenne WY buyer. The $1.43 millon sale was after the property had reportedly been on market for over a year. On the multi-family front, a CSU area triplex sold for $1.5 million. This property on Laurel St., reported rents at a range of $2100 to $2800 per month, and included 11 bedrooms.
A penthouse Class A office suite in downtown Boulder which was asking $1.5 million, or over $600 PSF, sold last month. The 2,500 SF commercial office condominium is another sale holding up those kinds of asking prices in Boulder.
The leasing activity was more active than usual (in this Covid economy era). Over 90 spaces were leased throughout the tri-county region. In this month of February, a 21,500 SF industrial lease in the Greeley Technology Center off of Highway 34 led the way. The next lease of significant size was also an industrial facility, though this one was off CR 8 in Berthoud. There, 16,000 SF was leased. Most of the remainder of the leases were smaller sizes, typically 1,000 – 4,000 SF. Smaller businesses may be feeling more optimistic in the future as shown by this level of leasing activity.