Industrial property with lots of tenants sells to apt. owner

A multifamily property owner turned out to be the “logical” buyer for an industrial property in Aurora that sold off-market.

In its first industrial acquisition, Nueva Americana III LLC bought Wheeling Service Center for $9.5 million. Located off Interstates 70 and 225, the property consists of seven multitenant industrial buildings totaling 121,400 square feet that are leased to mostly automotive tenants from 1,800 to 3,600 sf.

“I was working with the seller and really trying to understand who the logical buyer was for this. It’s kind of a nontraditional industrial asset,” said Brandon Paxton of Unique Properties Inc.-TCN Worldwide. “It has 120,000 square feet with 59 tenants, and it’s very management intensive. In that respect, it’s very much run like an apartment building. So these guys were able to understand it pretty well simply because of that.” Paxton said he initially didn’t think of the buyer as a prospect for the property but that the more he dug in, “It just made sense that an apartment buyer might be a logical buyer.”

Wheeling Service Center is located at 3728-3770 Wheeling St. It was built in the mid-1970s. The seller, Wheeling Service Center LLC, had owned the property since 1991.

There was one vacant unit at the time of the sale.

“Very rarely is there a vacancy here. Especially with the smaller units, they’re just super easy to lease,” said Paxton. “It’s getting tougher and tougher to find places where you can do automotive use, so this thing stays right at or very close to 100 percent occupied.”

The buyer exchanged into the property from an apartment asset it sold.

The seller also completed a 1031 exchange – which actually occurred the same day that it sold Wheeling Service Center. It exchanged into the Lazydays RV dealership at 3610 and 3640 Chambers Road in Aurora, which includes approximately 12,000 sf of sales and service space on 11 acres. The price was $4.29 million.

Featured in CREJ’s Oct. 4-17, 2017, issue

Jill Jamieson-Nichols has been an Editor with the Colorado Real Estate Journal for more than 15 years, providing coverage of office, industrial, hospitality and mixed-use development news in the Denver metro area, plus all property types in Northern Colorado, Boulder County and along the Highway 36 corridor. Prior to joining CREJ, Jill was Editor of…