A new industrial park with great freeway access is coming to yet another former Denver area greenhouse property.
SunCap Property Group and Colony Industrial, a subsidiary of Colony Capital, bought the Welby Gardens property at East 74th and Clayton Street in Adams County to develop North Central Logistics Center. The development will include 640,995 square feet of speculative industrial product.
Welby Gardens, a fourth generation wholesaler to independent growers and landscapers, had a half-million sf of greenhouses on the property that are being repurposed. The company continues to operate another 500,000 sf of greenhouse space in the Denver area, along with a garden center in Arvada.
North Central Logistics Center will offer a “last-mile” setting 6 miles north of downtown Denver with immediate access to Interstate 76, and quick access to Interstates 25 and 70.
Mitch Zatz
“The access to highways is second to none in any of the north-central developments,” said Mitch Zatz of JLL, who noted that keeping transportation costs down is a key driver for warehouse and distribution companies.
Mike Orr
“We are thrilled to be bringing speculative space to the Denver community,” said Mike Orr, senior vice president of SunCap Property Group. “To date, our projects in the area have been build-to-suit projects. North Central Logistics Center allows SunCap to demonstrate our understanding of the needs of today’s industrial user and deliver a product that suits both tenants and their employees.” Access options will allow users to avoid traffic congestion associated with the Colorado Department of Transportation’s Central 70 project, slated to continue through 2022.
North Central Logistics Center will comprise three buildings accommodating tenants in a variety of sizes and configurations. Two of the buildings, 167,781 and 182,983 sf, will be single loaded with truck loading in back. A central, 290,239-sf building will offer crossdock loading. All buildings will have 32-foot ceiling clearance and ample employee parking.
Jason White
While there is room for a large user, “You don’t see a ton of users that are bigger than 300,000 square feet in this market,” commented JLL’s Jason White, explaining the park will accommodate tenant sizes more typical in the market – 25,000 sf and up. He and Zatz represented sellers in the land transaction and are handling leasing for North Central Logistics Center.
In addition to service companies doing business in the Denver metro area, “We’re seeing an increase in 3PLs (third-party logistics) doing last-mile deliveries for retailers, and this location is Main and Main,” said Zatz. “We already have two RFPs that we’re responding to.”
SunCap and Colony Industrial are the latest developers to acquire close-in, interstate-accessible sites that previously housed garden centers and/or greenhouses. Communale Properties is developing 194,538 sf of industrial space on the former Center Greenhouse property at the northeast corner of Interstates 70 and 270. Prologis bought the Paulino Gardens property at 6300 N. Broadway, near the interchange of Interstates 25 and 76.
There are multiple reasons for the changing uses: The land is consumed by greenhouses and parking vs. expensive structures; there is interstate access; garden center/greenhouse margins are tighter due in large part to competition from Home Depot, Walmart, etc.; and the properties were operated by families advancing in age.
Members of the second through fourth generations of the Gerace family, which has operated Welby Gardens since 1948.
“It was quite an emotional thing for us. It wasn’t just a piece of property. It was our heritage,” said John Gerace, whose grandparents bought and farmed the Adams County property in the early 1940s, raised their family there and founded Welby Gardens in 1948. Prior to the sale, some family members had lived on the land for 70 or more years.
SunCap didn’t disclose what it paid for the 33-acre site, but a deed indicates the price was $23.25 million, or $16 per sf. Just three years ago, Welby Gardens struggled to get an offer of $4 per sf for a portion of the property; it decided not to sell at the time.
This time around, “It was very competitive,” said White. “It got to a point where SunCap proved that they were the right developer for this project.”
“This needed to close once we started,” added Gerace, explaining that given the “tight knit industry” in which Welby Gardens operates, there would have been no going back if the deal didn’t go through. “SunCap knew that right off the bat. We’re not going out of business, but we’re downsizing significantly, and you just can’t backtrack,” he said.
“When we were sitting around the table, the consensus was that SunCap gave them the best comfort to fulfill that goal,” added White.
There was a rare synergy between the sellers, buyers and brokers throughout the process, added Zatz. Gerace concurred: “It was never confrontational. It was always in the spirit of trying to reach the common goal – friendly, cordial, fun. The whole process was like that.”
Construction of North Central Logistics Center will be managed by Murray & Stafford and is scheduled to begin by the end of the year. The park will be completed by early spring 2021.
“We’re excited for this project. We think it’s going to lease very well,” said White.
