Industrial leasing activity in Denver and elsewhere across the country may be retreating from the pandemic era's record high, yet for some centrally located pockets, investors are willing to make the bet that the slowdown is only temporary.
A recent deal in one of Colorado's most concentrated warehouse hubs highlights that optimism, with a joint venture between Denver-based investment firm Westfield and the Reinsurance Group of America scooping up a fully leased, three-building industrial complex for nearly $75 million.
The acquisition that closed this month underscores the appeal of properties with stable tenant rosters that are located in areas with steady rent growth and leasing demand, even as conditions across the broader industrial market continue to soften.
“Centerpark has proven itself over the years as one of the most successful, highly functional industrial assets in Denver’s central submarket, with consistently low or no vacancy, and very little turnover in its tenancy," Cushman & Wakefield Executive Director Alec Rhodes, who helped broker the deal, said in a statement. He added that the complex has benefited from its "proximity to a diversified workforce, incredible last-mile demographics and immediate access" to regional thoroughfares.
The more than 431,150-square-foot park is home to 10 tenants, including commercial printer Mittera, wine wholesaler and importer CTS Distributing and heating equipment supplier Charles D. Jones Co., according to CoStar information.
Spanning upward of 22 acres, Centerpark's location at 4900, 5000 and 5050 Osage streets is a short drive from downtown, Denver International Airport and some of the city's most concentrated employment hubs. The area has consistently ranked among the top in terms of leasing volume and rent growth with tenants collectively signing on for about 1.7 million square feet of industrial space throughout last year, according to data from CoStar and Cushman & Wakefield.
Sales activity across Denver's industrial market has slowed to a crawl as investors have collectively funneled less than $940 million into the area over the past year, according to CoStar analysis, more than 65% below the peak of nearly $3 billion reported in late 2021. However, investors pressured by rising interest rates and the increasingly challenged financing landscape have been drawn to the stability that comes with fully leased properties in high-demand areas.
For the Record
Cushman & Wakefield’s Will Strong, Jim Carpenter, Kirk Kuller, Michael Matchett, Molly Hunt and Dean Wiley with the brokerage's national industrial advisory group brokered the deal with Westfield and the Reinsurance Group of America. Cushman & Wakefield’s Alec Rhodes, SIOR; Aaron Valdez, SIOR; and Tyler Smith, SIOR, provided leasing advisory and were retained to market the park on behalf of the new owners.