Colorado-Real-Estate-Journal_360881

Page 10 - September 6-19, 2023 www.crej.com Office by Avalon Jacka LAFAYETTE – One of the nation’s largest privately held companies specializing in health care-related real estate acquisi- tions has acquired a medical office property in the U.S. Highway 36 corridor for an undisclosed price. Montecito Medical purchased the 9,454-square-foot building at 120 Old Laramie Trail, which is tenanted by Colorado Urol- ogy and is home to the Colorado Prostate Cancer Center. Colorado Urology is listed as the previous owner on Boulder County public records. The acquisition marks Montecito’s entry into the Colo- rado market. “We are thrilled to expand our presence in the Mountain West and to establish a presence in one of the country’s fastest growing metropolitan areas,” Chip Conk, CEO of Montecito Medical, said in a statement. Colorado Urology is the domi- nant group in its specialty with- in a 25-mile radius of the city, according to a press release. Colo- rado Urology is affiliated with United Urology, which is one of the largest networks of urology affiliate practices in the country. Colorado Urology’s Lafayette location provides radiology and oncology services and serves as a referral center for the United Urology network across Denver. Rus Gudnyy, senior vice presi- dent of investments at Montecito Medical, called the Denver area a “highly desirable market area” in a statement, noting the com- pany looks forward to building a “long-lasting relationship” with Colorado Urology. Headquartered in Nashville, Tennessee, Montecito Medical has completed transactions involving more than $5 billion in medical real estate since 2006. Other News n CENTENNIAL – A pair of office towers near the Den- ver Tech Center has sold to an employee-wellness-and-engage- ment service provider. Better Space Inc. purchased the Southfield Towers, a 2.93-acre property at 12835 E. Arapahoe Road, for $4.75 million, or $55 per square foot. Built in 1984, the asset includes two eight-story towers with 360-degree unobstructed views and 86,480 rentable square feet between the two buildings. The property’s versatile space can accommodate a wide range of businesses and ventures. Its strategic location on East Arapa- hoe Road offers accessibility, vis- ibility and growth potential. NAI Shames Makovsky’s Evan Makovsky, Paul Cattin, Adam Hubschman and Solomon Stark represented the seller, BCL LLC & Wyco Equities Inc. “We’re thrilled to have negotiat- ed a deal that meets the needs of our seller while allowing the new owner to modernize the property and lease it back up,” Cattin said in a statement. “This complex deal underscores our firm’s com- mitment to excellence and inno- vation in the field and could not have been done without the great work of our team.” n LAKEWOOD – An office/ medical building built in 1967 near the Kipling Street and West 20th Avenue intersection has traded hands. Colorado-based Reff LLC pur- chased the 5,760-sf building from Simoes Azevedo Ranch LLC, a California-based LLC, for $700,000. The 0.27-acre property at 10085 W. 18th Ave. sold for nearly double the price of the previous sale, which closed at $380,000 in 2015, according to Jef- ferson County records. Alex Scott of Fuller Real Estate represented the seller, while David Williams of Compass Real Estate represented the buyer. The prop- erty was for- merly used for an orthopedic medicine prac- tice, accord- ing to a Fuller brochure. The ADA-accessible building fea- tures an indoor pool, shower/ locker rooms and natural lighting. Reff LLC will perform minor cosmetic renova- tions on the asset, according to Reff’s Kellie Alkayam. This fall, Reff will open a coworking space at the property geared toward creatives called Creative Locale. Creative Locale will feature four offices for rent and an art studio rental space in the lower level with memberships available. n METRO DENVER – Shel- don-Gold Realty Inc. facilitated multiple office leases on the Front Range. Interstate Medical Licensure Compact leased 4,383 sf at 7921 Southpark Plaza, Suite 109, in Littleton, represented by Mary Jo Cummings of Sheldon-Gold. The landlord, IBC Denver VII LLC, was represented by Dan Miller and Andrew McCabe of Cush- man & Wakefield. Mednow Clinics Inc. leased 4,291 sf at 5161 E. Arapahoe Road, Suite 290, in Centennial, repre- sented by Eric Gold of Sheldon- Gold. The landlord, Crestone Forest, was unrepresented in the transaction. Techneaux Technology Ser- vices leased 3,219 sf at 8670 Wolff Court, Suites 135 and 160, in West- minster, represented by George Moseley of Sheldon-Gold. The landlord, Sunflower Bank, was not represented in the transaction. Cummings represented two additional tenants in their lease transactions. Brian Weatherman Agency leased 1,937 sf at 8500 W. Bowles Ave., Suite 310, in Little- ton. John Becker and Mike Haley of Fuller Real Estate represented the landlord, Miller Real Estate Investments. Clear View Coun- seling LLC leased 1,251 sf at 51 W. 84th Ave., Suite 301, in Thornton. The landlord, TDE Investments LLC, was unrepresented. s Montecito Medical enters Colo. market with MOB acquisition T he real estate landscape has always been shaped by larger economic, technologi- cal and societal trends. From the rise of e-commerce giants chal- lenging brick-and-mortar retail to the housing crisis during the Great Recession, every segment of real estate has faced its unique challenges. For Boulder County, in the aftermath of the COVID-19 pandemic, the challenge has been the evolving office market. n Changing dynamics of the office market. Boulder Coun- ty’s office market, specifically downtown Boulder, witnessed a notable vacancy rate of 28.7% in second-quarter 2023. However, it’s essential to emphasize that this statistic is not necessarily a reflection of a declining interest in Boulder County as a commer- cial hub. Many firms are eyeing the region for potential expan- sion, especially homegrown businesses, which are display- ing significant activity. The pre- vailing sentiment suggests that businesses already established in Boulder County feel more secure expanding in familiar territory, seeing it as a lower-risk move. n Redefining workspaces in the wake of COVID-19. The COVID-19 pandemic significant- ly altered the traditional office paradigm. Many questioned the need to commute daily, opting instead for remote work- ing options, especially in tech hubs like d o w n t o w n Boulder. This shift predomi- nantly favored industries that could easily adapt to the digital work- space, causing areas dense with tech companies to face higher vacancy rates. The current labor market dynamics seem to have given the workforce considerable leverage, with many expressing a preference for remote work. However, a glimpse of opti- mism emerges when consider- ing quality office buildings in prime locations. Despite broader market sentiments, well-located and high-quality office spaces in Boulder County continue to see some demand. n The allure of smaller spac- es and amenities. Recent trends indicate a distinct preference for smaller office spaces. Over the past 18 months, in parts of Boul- der County, approximately 85% of finalized lease deals for office space were for spaces under 4,000 square feet. Companies that are now getting comfortable with what a hybrid work environment looks like are now starting to lease space again, but that means leas- ing anywhere from 20% to 40% less than their previous space. Moreover, turnkey solu- tions are growing in favor. Compa- nies are gravitating toward office spaces that require little to no customization, allowing them to move in immediately and not worry about tenant finish proj- ects. Amenities are also popping up on the wish list for companies looking to get their employees back into the office. Research completed by Inc. magazine showed properties that incorpo- rated a diverse roster of ameni- ties will experience 12% higher demand from tenants. Wish list amenities may include rooftop yoga, wine tasting/coffee loung- es, pop-ups in courtyards, health and wellness centers for relax- ation and meditation, golf simu- lators, dog runs and pickleball. Building owners like Beacon, BMR and SteelWave are setting the amenity bar high in order to create a leasing advantage. Meanwhile, many other owner- ship groups are contemplating how to pull the trigger on adding just the right amenity package to get deals done. n Navigating financial impli- cations. Creating turnkey spaces and adding amenity centers come with significant costs. Keeping up with the Joneses to make sure your building does not fall behind in terms of quality and amenities can be a risky strategy, especially since some popular amenities today can be viewed as trendy tomorrow. Combined with the ever-increasing operat- ing expenses, primarily due to taxes, landlords have some tough decisions to make regarding put- ting capital into buildings versus patiently waiting for the right tenant. n Looking ahead. While new, traditional office projects are sparse in Boulder County’s pipe- line and subleases are still litter- ing the marketplace, optimism remains. Many real estate profes- sionals view the current challeng- es as temporary, predicting that Boulder County will leverage its strengths when the market tide changes. Companies prioritize locations that have a talent pool and out- door lifestyle, so Boulder County fits this bill perfectly. With many high-profile companies like Apple, Amazon, Google and AI giant Nvidia having a foot- print in Boulder, along with its appeal to global professionals, an incredible start-up community and being home to world-class educational institutions like the University of Colorado, Boulder remains an attractive destination for businesses. Not to mention, football season is about to kick off, and the Coach Prime effect will certainly impact Boulder’s office market ... we hope. s bgamble@deancallan.com berkley@deancallan.com Boulder County office mkt. adapts, looks for busier Q4 Becky Gamble CEO, Dean Callen & Co. Berkley Gamble- Schweid Director of research and marketing, Dean Callen & Co. A glimpse of optimism emerges when considering quality office buildings in prime locations. Despite broader market sentiments, well-located and high-quality office spaces in Boulder County continue to see some demand. Business Wire Montecito Medical purchased the fully leased medical office building at 120 Old Laramie Trail. David Williams Alex Scott