A private investor from Florida paid $3.25 mil for a new construction, freestanding, multi-tenant retail building in Westminster, CO. The 5.4k sf ($602/sf), three-tenant building, located at 13591 Huron St, includes a Dunkin’ Donuts with a drive-thru, a Bank of America ATM and Huron Liquor.
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. It was sold by Mark Development Inc, out of Redlands, CA.
The building was constructed in 2016 and is situated on 1.15 acres at the signalized intersection of Huron St and 136th Ave in Westminster. Bank of America has a 900 sf location at the property and the company’s new ATM prototype. All three tenants have initial 10-year leases with fixed rental increases.
“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 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.”
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 350k sf outlet mall opening in 2018, ½ mile away from property); St. Anthony North Health Campus (a brand-new 92-bed hospital in over 60k sf, ½ mile away from property); The Orchard Town Center (a 1.5 msf 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).