CURRENT PROPERTY

6901 W 117th Ave.

Broomfield, CO

ASSET CLASS:

Industrial

ASSET SUB-TYPE:

Multi-unit

BUILDING:

35,000 sq ft, (14) 2,500 sq ft units, metal exterior

Investment Report

Thesis

Overview

  • Small unit industrial is a good performing asset in economic downturns.
  • Stays fully occupied nearly all of the time due to high demand and low inventory of like product.
  • Very few, new small-bay building spaces (0-6,000 sq ft) have been created in the past 10 years.
  • The building was purchased with a projected net annualized return of 13.03%.
  • There is a light-rail stop that will be created a few blocks away within the next 10-15 years. This will change this building’s highest and best use to something with higher density.
  • The northwest Denver submarket for industrial has a vacancy rate of 1.7%, which is very low.
  • Broomfield County has not created any more industrial zoning creating the potential for strong demand.

Risks

  • 7 of the 14 units are up for renewal this year.
  • We will stagger leases going forward to reduce a potentially large amount of turnover.
  • Another risk is tenant credit. We are trying to improve credit for each time a unit becomes available.

OUTLOOK & EXIT

  • Work is still being completed to remedy all water issues on-premise.
  • The building is currently fully occupied.
  • The property is performing as expected with a forward projected net annualized return of 14.03%, which includes the leverage note.
  • The unlevered equivalent return is a weighted average annualized net 11.02%.

More Information

For more information about this or any of our other assets…