J.P. Morgan Buys Hub 25 Industrial Campus for $74 Million in First Denver Trade of Its Kind this Cycle
23 May 2018
Westfield Company Takes Former Mapleton High School from Development to Disposition in Two Years
CBRE announced today the $74 million sale of Hub 25, a recently completed Class A multi-tenant industrial campus located at 601 East 64th Avenue in Denver, on behalf of Westfield Company. Institutional investors advised by J.P. Morgan Asset Management purchased Hub 25 on May 10, marking the first new construction industrial campus sale in Central Denver this cycle.
The site is the former home of Mapleton High School, which sat vacant for 20 years before Westfield purchased the land in 2016 to develop it into a four-building, 421,499-square-foot industrial park. In just over two years, the project advanced from demolition to development to lease-up and now disposition.
“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.
Westfield launched Hub 25 speculatively in the spring of 2016, retaining CBRE to market the space for lease after Mr. Carner and Mr. Ballenger represented Mapleton School District in the sale of land to Westfield. CBRE secured six tenant leases prior to construction completion, making the project 70 percent pre-leased upon delivery in mid-2017. Currently Hub 25 is 95 percent leased to eight tenants, including BSI Designs, Mountain High Appliance and Rep Fitness.
The rapid lease-up of Hub 25 combined with the size and scope of the offering drove investor interest in its sale.
“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 Jeremy Ballenger, Senior Vice President, CBRE.
According to a recent CBRE survey of commercial real estate investors across the Americas, Denver now ranks the seventh most-attractive metro in the Americas for property investments. In the same survey, respondents ranked industrial as the No. 1 preferred property type for investment.
“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,” stated Hien Le, Executive Director of J.P. Morgan Investment Management, Inc.
Hub 25 includes four buildings ranging from approximately 43,500 to 145,000 square feet. The buildings offer a mix of distribution, office and showroom space with clear heights between 24 and 28 feet, ESFR sprinklers, front park/rear load functionality, 135-foot truck courts, trailer parking and storage space. In 2017, the project won a national Tilt-Up Achievement Award for its innovative and efficient construction.
The campus is located on 23.76 acres between I-70 and I-76 in unincorporated Adams County. It is within an Enterprise Zone with no metro district overlays, which translates to a 25 to 35 percent potential tax benefit to tenants. Hub 25 is accessible via the first exit north of the I-70 and I-25 interchange, with 1,800 linear feet of frontage along North I-25 and visibility to more than 214,000 vehicles per day.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.