Lone Tree day care sells for $6.45M

A Colorado-based buyer acquired a newly constructed day care center in Lone Tree as the upleg of its 1031 exchange.

RPS Investment LLC purchased the 13,068-square-foot retail property at 9092 Sky Ridge Ave. from seller Ridgegate Retail LLC for $6.45 million. Troy Meyer and Kevin Matthews with SVN | Denver Commercial represented the buyer, while the Hanley Investment Group represented the seller. The buyer traded out of a multitenant shopping center in Colorado Springs to acquire the asset.

The retail property was constructed this year as a build-to-suit for New Horizon Academy, an early education center. The tenant occupies the property under a single-tenant, triple-net, 15-year lease. According to Matthews, the buyer was attracted to the passive nature of the investment.

“The buyer was attracted to the ease of management at this property after trading out of a multitenant shopping center with seven tenants,” Matthews said. “Also, with one tenant occupying the entire space under a long-term lease, the buyer won’t have to worry about fluctuations in tenancy.”

SVN also represented the buyer in the sale of the Colorado Springs shopping center, which closed in February, just before the onset of COVID-19. The timeline of the exchange proved challenging as the buyer’s 45-day identification deadline landed three days before the IRS implemented an extension period, which began April 1st and would have given the buyer until July 15 to find a new property.

“We had a bit of a challenge in needing to identify a property during the early chaos of the statewide shutdown and global pandemic,” Matthews said. “Fortunately, we were able to source this property off-market, which wound up being a perfect fit for the buyer’s requirements.”

In addition to the property’s long-term tenant and new build, the buyer also saw promise in what Matthews calls an “infrastructure rich” location, adjacent to a Super Target anchored shopping center and within proximity of Sky Ridge Medical Center.

According to Matthews, the buyer added this property to a portfolio of other smaller assets across the country.

Featured in the September 16-October 6, 2020, issue of CREJ