Single-tenant Denver portfolio sells for $6.95 million

A Denver retail portfolio consisting of three Brakes Plus-leased properties sold for a combined $6.95 million in an all-cash transaction.

Kathleen Ann Ross Trust, an instate investor, purchased the retail properties at 9297 S. Broadway in Highlands Ranch and 16770 E. Iliff Ave. and 24450 E. Smoky Hill Road in Aurora from seller Chi Chis of Colorado Springs LLLP. Drew Isaac and Brian Bailey of Marcus & Millichap represented the seller, while Mike Pepper of Hinge Brokers represented the buyer. The sale was part of the buyer’s 1031 exchange.

Brakes Plus occupies each property under separate, absolute triple-net leases, which are corporately guaranteed by more than 900 locations. Each property has 17 years remaining on its lease term, with four five-year renewal options after the primary term.

Isaac said after hitting the market in early June, the property had a quick turnaround, with several investors highly interested in the “e-commerce- and recession-resistant” property.

“We had multiple offers right out of the gate, and we selected a buyer within the first two weeks it was on the market, with the property closing June 25,” Isaac said.

Isaac attributes the high investor demand for the property to an accelerated trend toward investing in e-commerce- resistant, tenant leased properties. He said since the onset of COVID-19, Marcus & Millichap has seen increased interest in auto- and drive-thru-leased properties because they provide services that can’t be offered online, which is a threat to many retailers. However, Isaac said the properties were desirable for other reasons as well.

“The long-term leases and absolute triple-net nature of the leases drew in investors. The tenant is responsible for all expenses related to the property, including capital repairs, so it’s truly a 100% passive investment,” Isaac said. “Also, these are some of the highest performing Brakes Plus properties in the state.”

According to Isaac, the properties at South Broadway and East Iliff Avenue were built in 1999 and have undergone multiple renovations to keep them up to date. The Smoky Hill Road location was built in 2015.

All of the properties are located in retail hubs with nearby complementary businesses, including restaurants and home-improvement and convenience stores.

Featured in the August 5-18, 2020, issue of CREJ