DENVER – Hub 25, a recently completed Class A multi-tenant industrial campus located at 601 East 64th Avenue in Denver, has sold for $74 million.
Institutional investors advised by J.P. Morgan Asset Management purchased Hub 25, marking the first new construction industrial campus sale in Central Denver this cycle.
The site is the former home of Mapleton High School, which sat vacant for 20 years before Westfield Company — a Denver-based commercial real estate development, investment and management firm — purchased the land in 2016 to develop it into a four-building, 421,499-square-foot industrial park. In just over two years, the project advanced from demolition to development to lease-up and now disposition.
“What Westfield accomplished at Hub 25 is an amazing feat. They took on a complicated piece of land that needed significant improvements, recognized a need in the market for small-bay, ligh industrial space and delivered an outstanding product that piqued the interest of top-tier capital. That process often takes several years, and Westfield made it happen in just over two,” said Tyler Carner, a senior vice president with CBRE in Denver, who represented Westfield in the leasing and sale of Hub 25 along with his partner Jeremy Ballenger.
“What I found most significant about the sale is that the institutional investors accepted Denver as a top tier market, based upon the interest from a number of buyers at the pricing level typically only seen in coastal and Tier 1 markets,” said Randy Schwartz, a partner with Westfield Company. “Having closed the property with no zoning or entitlements, had it not been for the commitment and execution of that commitment from Adams County to cooperate and process the project in an expeditious manner, we could not have come close to achieving our timing.”
Currently Hub 25 is 95 percent leased to eight tenants, including BSI Designs, Mountain High Appliance and Rep Fitness. The rapid lease-up of Hub 25 combined with the size and scope of the offering drove investor interest in its sale.
“We saw substantial investor interest at Hub 25. Denver is continuing to attract new investors who are aggressively pursuing opportunities that offer a significant foothold in the market. Between Hub 25 and the recent Gateway portfolio sale, 2018 has ushered in a new era for industrial real estate investment in Denver,” said Jeremy Ballenger, senior vice president, CBRE.
According to a recent CBRE survey of commercial real estate investors across the Americas, Denver now ranks the seventh most-attractive metro in the Americas for property investments. In the same survey, respondents ranked industrial as the No. 1 preferred property type for investment.
“This investment in Hub 25 represents the intersection of many of our firm’s research-driven thematic investment ideas in the industrial sector. Westfield developed a high quality project in a fantastic location,” stated Hien Le, Executive Director of J.P. Morgan Investment Management, Inc.
The campus is located on 23.76 acres between I-70 and I-76 in unincorporated Adams County. It is within an Enterprise Zone with no metro district overlays, which translates to a 25 to 35 percent potential tax benefit to tenants. Hub 25 is accessible via the first exit north of the I-70 and I-25 interchange, with 1,800 linear feet of frontage along North I-25 and visibility to more than 214,000 vehicles per day.
Image courtesy of CBRE
