Westfield Co. has sold its newly developed Hub 25 industrial campus for $74 million, or $175.56 per square foot.
Westfield completed the 421,499-sf infill development at 601 E. 64thAve. in Denver last year. The four-building campus is 95 percent occupied by eight tenants, including BSI Designs, Mountain High Appliance, Rustic Log Furniture Inc., Rep Fitness and others.
J.P. Morgan Investment Management Inc. was the buyer.
“This investment in Hub 25 represents the intersection of many of our firm’s research-driven thematic investment ideas in the industrial sector. Westfield developed a high-quality project in a fantastic location,” said Hien Le, executive director of J.P. Morgan Investment Management.
The transaction represents the first sale of a newly built industrial campus in central Denver this cycle, according to CBRE.
Westfield developed Hub 25 on the former Mapleton High School site, which was vacant for 20 years before the company acquired the property in 2016. The development went from demolition to lease-up and disposition within two years.
“What Westfield accomplished at Hub 25 is an amazing feat. They took on a complicated piece of land that needed significant improvements, recognized a need in the market for small-bay, light-industrial space and delivered an outstanding product that piqued the interest of top-tier capital. That process often takes several years, and Westfield made it happen in just over two,” said Tyler Carner, a senior vice president with CBRE in Denver who represented Westfield in the leasing and sale of Hub 25 along with his partner Jeremy Ballenger.
“What I found most significant about the sale is that the institutional investors accepted Denver as a top-tier market, based upon the interest from a number of buyers at the pricing level typically only seen in coastal and Tier 1 markets,” said Randy Schwartz, a partner with Westfield Co. “Having closed the property with no zoning or entitlements, had it not been for the commitment and execution of that commitment from Adams County to cooperate and process the project in an expeditious manner, we could not have come close to achieving our timing.”
Westfield is a Denver-based commercial real estate development, investment and management firm that focuses on investment properties that generate above-market returns relative to the underlying risk.
The company began Hub 25 on a speculative basis in spring 2016. CBRE secured six leases prior to completion of construction. The project was 70 percent preleased upon delivery.
“We saw substantial investor interest at Hub 25. Denver is continuing to attract new investors who are aggressively pursuing opportunities that offer a significant foothold in the market. Between Hub 25 and the recent Gateway portfolio sale, 2018 has ushered in a new era for industrial real estate investment in Denver,” said Ballenger, senior vice president, CBRE.
Denver now ranks as the seventh most attractive metro area in the Americas for property investments, according to a recent CBRE survey. The same survey ranked industrial as the No. 1 preferred property investment type.
Hub 25’s buildings range from approximately 43,500 to 145,000 sf and include a mix of distribution and office/showroom space with clear eights of 24 to 28 feet.
The campus sits on 23.76 acres between Interstates 70 and 76. Located in unincorporated Adams County and within an enterprise zone, it provides tenants with potential tax benefits of 25 to 35 percent, according to CBRE.