Three-tenant building sells for $3.3 million, one of the lowest cap rates for a multi-tenant pad in the Denver MSA
WESTMINSTER, Colo. – (RealEstateRama) — Hanley Investment Group Real Estate Advisors, a nationally-recognized real estate brokerage and advisory firm specializing in retail property sales, announced today that the firm has completed the sale of a new construction, freestanding, multi-tenant retail building at 13591 Huron Street in Westminster, Colorado. The three-tenant building includes Dunkin’ Donuts with a drive-thru, Bank of America ATM and Huron Liquor. The purchase price was $3,250,000, representing $603 per square foot. The property closed at a 5.9 percent cap rate, one of the lowest cap rates for a multi-tenant retail pad in the Denver MSA.
Hanley Investment Group Vice President Jeff Lefko and Executive Vice Presidents Bill Asher and Jeremy McChesney represented the seller, Mark Development Inc. of Redlands, California. Peter Peluso of Legend Partners in Denver represented the buyer, a private investor from Florida.
“We generated 14 offers within the first two weeks of marketing the property due to the quality of the location – a high-traffic, signalized intersection in an affluent, fast-growing Denver submarket – and the quality of the tenants on long-term leases in a newly constructed building,” said Lefko. “The strength of the asset and its fundamentals created an immediate bidding war which resulted in a sale price over the original list price and one of the lowest cap rates for a multi-tenant retail pad in the Denver MSA.”
The 5,389-square-foot building was built in 2016 and is situated on 1.15 acres at the signalized intersection of Huron Street and 136th Avenue in Westminster. All three tenants have initial 10-year leases with fixed rental increases, according to Asher.
“The Dunkin’ Donuts’ lease was very appealing to investors as it was guaranteed by a 400+ unit operator,” said McChesney. “The franchisee is extremely experienced operating brands including Little Caesars Pizza, Wingstop, Red Robin Gourmet Burgers and Brews, and Sizzler. It was a very attractive characteristic to the asset that created a tremendous volume of interest and was viewed by investors similar to purchasing an investment with a corporate guaranty such as a Starbucks.”
Bank of America has a 900-square-foot location at the property and it is the company’s new ATM prototype.
“The investment offers a secure and stable income stream with internet-resistant tenants positioned for long-term success,” said Asher. “The property also benefits from over 270,000 people in a five-mile radius and an average household income exceeding $110,000 in a one-mile radius.”
There are over 33,000 cars per day at the intersection of Huron Street and 136th Avenue with points of ingress and egress from both streets, Lefko notes. The City of Westminster has seen rapid growth and is continuing to grow with major new developments including Denver Premium Outlets (Simon’s new 350,000-square-foot outlet mall opening in 2018, ½ mile away from property); St. Anthony North Health Campus (a brand-new 92-bed hospital in over 60,000 square feet, ½ mile away from property); The Orchard Town Center (a 1.5-million-square-foot outdoor shopping lifestyle center anchored by Target, Macy’s and AMC Theatres, one mile away from property); and a new Amazon distribution center, which will be the largest industrial building in Colorado and is expected to create over 1,500 full-time jobs by late 2018, approximately one mile away from property).
According to Asher, the north I-25 region of Westminster is a key employment hub and a major gateway into the city. “Prominent companies in a one-mile radius include Google, Dish Network, Avaya, Brilliance Data, and soon to be Amazon,” said Asher. “The site is only ½ mile away from Interstate 25, Denver’s main north/south freeway that leads directly to downtown Denver, a 20-minute drive.”
The property is also adjacent to the recently built Enclave and Preserve at McKay Shores Development, which features 550 luxury homes built between 2012-2016 and sell in the $650,000 to $1.2 million range.
Lefko adds, “We are continuing to see newly constructed, multi-tenant pad sales set record-breaking cap rates across the country. The velocity of sales in the category is starting to match the single-tenant net-leased market due to the opportunity to acquire a similar passive investment with a diverse income stream and corporate leases at a similar or better yield than a single-tenant asset.”
About Hanley Investment Group
Hanley Investment Group Real Estate Advisors is a retail investment advisory firm with a $6 billion transaction track record nationwide, who works closely with individual investors, lending institutions, developers, and institutional property owners in every facet of the transaction to ensure that the highest value is achieved. For more information, visit www.hanleyinvestment.com.
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MONAGHAN COMMUNICATIONS, INC.