BrokerageIndustrial

Pauls Portfolio Sale Marks Single Largest Denver Industrial Transaction on Record

DENVERPAULS, a leading Denver-based capital management and real estate development firm, has sold more than 3.75 million square feet of industrial properties located across four states. More than 1.93 million square feet of the portfolio is located in Denver, which marks the city’s single largest industrial transaction on record.

The price was not disclosed, but records and news reports put the deal at $206 million.

Jim Bolt with CBRE Industrial & Logistics in Denver along with Randy Baird, Jack Fraker, Darla Longo and Chris Riley with CBRE National Partners represented the seller, the PAULS Corporation of Denver. The buyer, Clarion Partners of New York, purchased the portfolio in a sale that closed March 9, 2018.

“This represented a once-in-a-career opportunity to market one of the largest portfolios of high-quality industrial space under common ownership in Denver and nationally. PAULS developed this portfolio strategically over many years, focusing on high-growth distribution and supply-chain markets. They recognized the strong appetite for high-quality U.S. industrial assets and saw an opportunity,” said Jim Bolt, executive vice president, CBRE.

Aerial of Denver Clarion Gateway

Aerial of Denver Clarion Gateway

According to a recent CBRE survey, industrial is now the top preferred property type for commercial investment in the Americas. Within industrial, logistics properties, like those that make up the majority of the PAULS portfolio, are highly sought after. The survey also revealed that three of the markets featured in the Pauls portfolio are among the most preferred by investors. Dallas and Atlanta rank 2nd and 5th , respectively.

“Denver’s position has increased in recent years to the 7th top market for investors due to strong job and population growth along with attractive market fundamentals,” explained Tyler Carner, a senior vice president with CBRE in Denver, who will continue to market the Denver portfolio for lease along with CBRE’s Jeremy Ballenger and Mr. Bolt.

The Denver portion of the PAULS portfolio, now renamed Clarion Gateway, includes 14 Class A logistics properties located in the Airport submarket – the market’s primary distribution corridor.  The Denver portfolio is currently 96.5 percent leased.

Tenants across the portfolio span a mix of global, national and local companies including United Parcel Service Inc., Simmons, M S International, Whirlpool, SITCO Lumber and Cardinal Health. The portfolio is diversified by industry with no single tenant occupying more than 13 percent of the total rentable area.

“The PAULS portfolio allowed Clarion to acquire a critical mass of best-in-class industrial properties in one single transaction and gain instantaneous economies of scale and sizeable U.S. market share. While the highly functional buildings and name-brand tenancy provide reliable cash flow, the opportunity also exists to add value by leasing up the vacant space and developing the land parcels,” said Randy Baird, executive vice president, CBRE National Partners.

Clarion Partners is a leading diversified real estate investment management firm headquartered in New York with more than $44.7 billion in total assets under management. Founded in 1982, the firm’s client investments span office, retail, industrial, multifamily residential and hotel property types.

“The Airport submarket in northeast Denver has recorded an unprecedented 16 years of positive net annual absorption of industrial space. Denver was one of the first markets to recover following the recession, and our region continues to be a leader in job, population and economic growth. High-quality industrial properties like what’s found in Clarion Gateway are exactly what tenants are seeking and what will continue to help fuel our market’s expansion,” said Jeremy Ballenger,
senior vice president, CBRE.

Images courtesy of CBRE

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