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Colorado's Largest Industrial Property Changes Hands

Starboard Realty Purchases Property for Nearly $41 Million
October 8, 2018
A 1.3 million-square-foot building in Brighton, Colorado, sold for more than $40 million to Starboard Realty of California. The building is partially occupied but fully leased by Sears.

The largest industrial building in Colorado has sold to a California firm for nearly $41 million in one of the latest of several high-profile industrial sales that have occurred in the Denver area this year.

Newport Beach, California-based Starboard Realty Partners bought the 1.3 million square-foot building at 18875 E. Bromley Ln. in Brighton, according to brokerage Cushman & Wakefield, which represented the seller, a shell company called Brighton Lease Management that is registered to the same address as Delaware law firm Morris James.

The building is fully leased by big-box retailer Sears after being constructed for Kmart in 1996. Kmart Corp. sold the building in 1997, years before its 2004 acquisition of Sears Roebuck & Co.

Sears only occupies about 150,000 square feet in the building, according to CoStar research. Brokers at one time sought to sublease the property, but instead decided to pursue a sale.

The property is located on 104 acres on a well-traveled industrial corridor along Interstate 76. It sold for about $31 per square foot, which is in line with the average for similar building sales that have occurred this year.

"With limited construction for larger distribution centers and the lack of infill land sites along I-70, we expect the I-76 corridor will continue to see increased demand," said Dan Vittone, principal of Starboard Realty Partners. "We are excited about the prospect of repositioning this state-of-the-art project should Sears change their outlook for this regional distribution center."

Denver-area industrial sales have been plentiful this year, with newly built properties such as Hub 25 and Central 62 both changing hands soon after completion, and the record-setting disposition of Pauls Corp.’s 1.9 million-square-foot Gateway Park portfolio selling for $206 million.

That interest was broadly reflected in the latest deal. Drew McManus, managing director of Cushman & Wakefield’s Denver office who marketed the property, said the building garnered attention from a wide range of investors.

"Interested parties included domestic and foreign high-net worth individuals, private equity and institutional investors," he said.

For more information on the transaction, please see CoStar Comp #4534466.

Molly Armbrister, Denver Market Reporter  CoStar Group   
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