Northern I-25 corridor steaming ahead

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Front 25 in Weld County recently sold for $8.76 million along the Northern I-25 corridor.

The Northern Colorado Interstate 25 corridor always seems to be on the verge of taking off.

“That whole northern I-25 corridor is red-hot,” according to a prominent commercial real estate consultant.

She told me that in 2003, when I was the real estate editor of the Rocky Mountain News.

Anyone who makes the drive from Denver to Fort Collins can attest to the fact that there is much more development and activity along the I-25 corridor today than there was 14 or 15 years ago.

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This aerial maps shows how Front 25 fits into the Northern I-25 corridor. Cushman & Wakefield recently listed and sold Front 25 for $8.76 million.

“I do think that market, the entire Northern I-25 corridor, is gaining steam,” Alec Rhodes, a managing director for the Denver office of Cushman & Wakefield, told me on Monday.

“If you drive up that corridor, you can see developers and companies all taking claims for new development,” Rhodes added.

The biggest player along the corridor is J.M. Smucker Co., which in January announced it will spend as much as $340 million on a production facility in Longmont for its popular Uncrustables, frozen peanut butter and jelly sandwiches.

The facility, planned to be built in two phases, could cover 400,000 square feet and bring as many as 500 jobs to the area.

Still, if you take a longer view of the Northern Colorado I-25 corridor, “It has been a little bit hit and miss,” Rhodes noted.

“I can’t say there are any trends or metrics driving the market, like some giant residential development that is going gangbusters,” Rhodes said.

Historically, industrial developers have preferred to locate along Interstate 70, instead of I-25, he noted.

“They prefer the east-west corridor for crossing the country, rather than the north-south corridor,” he explained.

However, with such a shortage of industrial properties along I-70, there may start to be a shift, he said.

“Land prices are cheaper, you have good demographics, and we are seeing big and small deals along the Northern I-25 corridor area, with the biggest, of course, being Smucker,” he said.

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Alec Rhodes

Indeed, Rhodes and fellow C&W brokers Aaron Valdez, Chris Ball and Jason Ells recently listed, marketed and sold the Front 25 industrial development at 9586 E. I-25 Frontage Road in Weld County, just east of I-25 and south of Highway 119.

Front 25 is 15 miles from Boulder, 30 miles from Fort Collins, 35 miles from downtown Denver and 40 miles from the Denver International Airport.

United Power, the Brighton-based energy cooperative, paid $8.76 million, or $67.32 per sf, for the 130,117-sf building.

The seller was W.W. Reynolds, which paid about $10 million for it in late 2009, according to media reports.

At that time, it was the largest single-tenant industrial investment transaction in the Denver metro area.

When W.W. Reynolds bought it, Front 25 was 100 percent occupied by Abound Solar.

Unfortunately, Abound Solar, which received a $400 million federal government loan guarantee in 2010, filed for Chapter 7 bankruptcy liquidation in 2012.

Rhodes said that United Power is a good fit for Front 25.

Darrly Schriver, the CEO of United Power, agrees.

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Another view of Front 25 and the Northern I-25 corridor. Credit: Cushman & Wakefield.

“The purchase of this building is a great step toward meeting some of United Power’s strategic goals,” Schriver said, after United Power bought the building.

“As the territory becomes more populated, our ability to respond quickly and efficiently to our members is vital,” Schriver continued.

He said the new “west office” will allow United Power to deploy trucks and people to the west and north of its territory faster than if they were deployed from its headquarters in Brighton.

Prior to the sale, at one point, Front 25 had been listed at $11.71 million

“We’ve been able to negotiate a great financial deal on this purchase, in part because the seller appreciated the cooperative’s profile in the community and sees us a valuable resource,” according to Schriver.

And United Power isn’t done yet.

It is negotiating to acquire an adjacent plot of undeveloped land next to Front 25.

If you scratch the surface of just about any deal, there is a story behind it. The Rebchook Real Estate Corner looks at the what and who that make the Colorado commercial real estate industry spin every Tuesday and Thursday online at CREJ.com. The people behind the deals are passionate about what they do, whether they focus on offices, apartments, industrial, retail, land or lending. They also are passionate about their clients. Given the cyclical nature of commercial real estate, those who prosper in it have plenty of stories to tell. I hope to share them with you. 

This column includes news stories, in-depth looks at deals, profiles, Q&As and pieces on the latest trends. Contact John with story tips at JRCHOOK@gmail.com or 303-945-6865.

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