By Cara Smith-Tenta – CoStar News – July 20, 2020
A joint venture has sold an industrial property in greater Boulder, Colorado, for almost double what it paid for the property only three years ago, after upgrading and fully leasing up the space.
Berkeley Partners, based in San Francisco, paid $49 million, or $119.08 per square foot, for the 411,485-square-foot industrial property at 333-335 Centennial Parkway. in Louisville, Colorado, according to CoStar data and a statement from CBRE, which brokered the sale.
The sellers, institutional investor Long Wharf Capital and investor and developer DPC Companies, bought the property in 2017 for just $25.6 million, or $62.12 per square foot, according to CoStar data.
There are several factors that explain how Long Wharf and DPC turned such a profit on the deal.
Long Wharf and DPC invested capital into renovating the building, which was built in 1995, according to the CBRE. The renovations included new entries and additional dock doors, a new roof, an updated façade and new signage, according to CoStar.
The firms brought the property from 50% leased when they acquired it up to 100% leased when it was sold this month. Tenants at the property include a medical device company, a data processing company and a handful of engineering firms, according to CoStar data.
The property also benefits from its location in greater Boulder, which has grown into a strong, reliable distribution market. Last year, Boulder had its strongest year of industrial leases since 2016, according to CoStar data. Roughly 20% of the city’s economy is tied to the strong tech or information technology sectors and the region’s proximity to Denver make it a long-term, sustainable bet for industrial investors.
“Buyers were immediately drawn to [the property’s] unique combination of a fully leased multi-tenant industrial asset with a Boulder County address,” Jeremy Ballenger, executive vice president with CBRE, said in the statement.
Boulder County is home to several Fortune 500 companies, including General Electric, IBM, Lockheed Martin and Qualcomm, according to CoStar research. Tech behemoths including Google, Amazon, Uber and Twitter also have a presence in Boulder.
Boulder also appeals to companies in the biotech and health care industries – two fast-growing sectors with strong investor appeal. More than half of Boulder’s industrial stock is composed of flex space, which heavily caters to users needing both office space and research and development space, according to CoStar research.
Only one other city in the United States has half its stock of industrial space made up of flex R&D space: San Jose, California, which is itself a fast-growing tech hub, according to CoStar research.