Blue West Capital has completed the sale of a single tenant net leased Taco Bell ground lease property located at 33 East Ken Pratt Boulevard, Longmont, CO for $1,860,000. The property sold for a 4.47% cap rate. This sale represents the lowest cap rate for a single tenant investment property in Colorado since July 2017, according to CoStar. In July 2017, Robert Edwards and Tom Ethington, Managing Partners of Blue West Capital, sold a Payless ShoeSource in Glendale, CO for a 4.35% cap rate.
Tom Ethington and Zach Wright represented the seller in the Taco Bell transaction; a partnership of a Colorado-based developer and Midwest-based private equity real estate investment firm. The purchaser was a high-net-worth 1033 exchange investor based in California.
The Taco Bell ground lease started in 2018 and features 10% rental increases every five years throughout the primary term and renewal option periods. The ground lease features zero landlord responsibilities. Taco Bell is a subsidiary of Yum! Brands. Taco Bell operates over 7,000 locations and serves over $2 billion customers annually. This location is operated by a Denver-based franchisee with approximately 150 restaurants under management.
The property is positioned at a signalized entrance to Harvest Junction, a 367,000+ square foot power center anchored by Dick’s Sporting Goods, Best Buy, Ross Dress for Less, Bed Bath & Beyond, Marshalls, Lowe’s, and Walgreens. The surrounding population is rapidly increasing. The Census Bureau projects 2.5% annual population growth over the next five years. Longmont is located within prestigious Boulder County and is positioned approximately thirty-five miles north of downtown Denver.
“We received significant investor interest, including several offers above the asking price. The high investor demand is partially due to the long-term ground lease, frequent rental increases, and low price point,” said Tom Ethington, Managing Partner. “The Taco Bell sold for the lowest cap rate in Colorado since July 2017. Only thirteen single tenant properties have sold for a 4.50% cap rate or lower since the start of 2014 in Colorado,” added Zach Wright, Director of Net Lease Investment Sales.
Blue West Capital Arranges Sale of Redevelopment Property in Denver
Blue West Capital has completed the sale of a 31,363 square foot redevelopment property located at 9995 W Colfax in Denver, CO for $1,470,000. Brandon Gayeski represented both the purchaser and seller in the transaction. The purchaser was a national developer with an office in Denver while the seller was a private investor based in the Midwest.
The property is currently a free-standing building leased to Flowerama which has operated at the location since 2001. The property is located at the northeast corner of the heavily trafficked signalized intersection of Colfax Avenue and Kipling Street which experiences traffic counts in excess of 65,000 vehicles per day. The immediate area is rapidly expanding with projected 1.83% annual population growth within a one-mile radius over the next five years.
Well located properties along major thoroughfares in the Denver Metro, such as Colfax Avenue, are highly sought after amongst developers looking for infill redevelopment opportunities. These sites are commanding record-breaking high prices that are creating a rare opportunity for property owners to experience significant appreciation.
“The market for infill properties in the Denver MSA, with vintage leases and limited remaining lease term, is robust. Many savvy real estate investors are taking advantage of the current market cycle and selling generational assets to developers,” said Brandon Gayeski, Associate Advisor.
