ASB Real Estate Investments completed one of the largest industrial property acquisitions in Denver this year with the $72 million purchase of three buildings in the airport submarket.
The 633,193-square-foot portfolio included a 406,959-sf distribution building at 22100 E. 26th Ave. in Aurora, leased by Subaru of America; 9410 Heinz Way in Commerce City, a 140,630-sf building leased to Home Depot USA; and an 85,604-sf building that Old West Mattress Co. leases at 18300 E. 28th Ave. in Aurora. The average weighted lease term remaining is 3.1 years.
“This portfolio presented a rare opportunity to acquire three fully occupied distribution properties delivering scale and credit tenancy in Denver’s largest and most institutionally owned logistics corridor,” said CBRE Executive Vice President Jim Bolt, who represented the seller with CBRE’s Tyler Carner and Jeremy Ballenger. “The offering generated interest from institutional investors around the country, mostly all of whom have existing properties in Colorado and wanted to grow their presence in the market.”
The investment was made on behalf of ASB’s Allegiance Real Estate Fund, a $7.5 billion core vehicle. Blackstone affiliate Link Properties was the seller.
“This extremely attractive, cash-flowing investment further expands ASB’s Class A industrial portfolio and should help further buttress our income-oriented returns over the long term,” said ASB Senior Vice President and Western Region Head Aaron Duncan. “The surrounding market benefits from dramatic and dynamic residential development as well as from significant infrastructure investment in airport expansion and construction of new interstate express lanes. The prime, last-mile locations will be increasingly attractive to our high credit tenants and other logistics users as the Denver area continues to grow.”
Built between 2000 and 2007, the buildings feature Class A finishes, including 28- to 32-foot clear heights, ESFR sprinkler systems, and dock-high and drive-in loading. They have a market-standard 7% office finish, flexible layout configurations and ample truck court depths.
The portfolio also offers outdoor storage, covered loading and BNSF rail service. The buildings are all within the 84 million-sf airport submarket, the Denver metro area’s largest critical mass of warehouse and distribution facilities.
“Similar to other major logistics markets across the country, Denver has become extremely competitive from an investor demand perspective. 2018 was a record year for industrial sales volume in Denver, and that pace has continued into 2019, which signals the depth of the buyer pool for core industrial assets in this market. For the same reasons that tenants want to locate in the airport submarket to capitalize on strategic infrastructure improvements via significant residential/commercial development, the airport expansion and I-70 expansion projects, industrial owners also see long-term growth potential that these projects will generate,” Duncan commented.
Washington, D.C.-based ASB Real Estate Investments, a division of ASB Capital Management LLC, is a leading real estate investment management firm with more than $8 billion in gross assets under management for upward of 340 institutional clients. It has acquired more than 5.1 million sf of industrial space in major distribution markets since mid-2018 and also invests in office, multifamily and retail properties.
ASB’s Colorado assets include Colorado Center, 1755 Blake and the Hardware Block in Denver, along with four self-storage facilities throughout the city.