Crossroads becomes Havana 37 after $14.75 million sale
A 1970s industrial property on the Interstate 70 corridor in Denver changed hands at $14.75 million, or $98 per square foot.
BKM Capital Partners bought the 150,245-sf Crossroads Distribution Center from Denver based Kew Realty. BKM, a Newport Beach, California-based institutional fund manager, will spend approximately $1.2 million on capital improvements to the property at 3700 Havana St., which it is rebranding as Havana 37 Business Center. “This was a rare opportunity to acquire a well-occupied industrial business park, strategically located in the most desirable and one of the fastest-growing industrial submarkets of Denver,” said BKM Capital Partners Managing Director of Acquisitions Brett Turner. “Vacancy in the central East I-70-Montbello submarket is 2.4%, with no new deliveries scheduled that will compete in unit size to Crossroads Distribution Center, making this area and property ideal for our portfolio.” Havana 37 Business Center has 14 units, 12 of which were leased at the time of sale, for an overall occupancy of 90%. Tenant sizes range from 2,500 to 12,000 sf. Custom furniture builder New Classic Creations, Hardware Specialty Company Inc. and Feel the World Inc., which does business as Xero Shoes, operate on the property. Buildings 100 and 200, each roughly 28,000-sf rear-load buildings, sit along Havana Street. They include both dock-high and grade-level loading. Building 300 is a 94,208-sf building with dock high doors. The 7-acre property is less than a mile from Interstate 70 to the north and Interstate 225 to the east. Once completed, the Central 70 Project to reconstruct a 10-mile stretch of I-70 and add new express lanes will improve the submarket’s desirability among tenants, Turner said. Completed in 1973, the property has 14- to 20-foot clear height and a parking ratio of 1.05:1,000 sf. Office build-out is 23%. Although just over half of the industrial development in Denver is occurring in the airport submarket in which Havana 37 is located, new product in focused on large-scale distribution users, so it won’t compete with Havana 37, Turner noted. The submarket has seen average rent growth of more than 8% per year over the last six years. “This was an off-market transaction that resulted in a price agreement at a significant discount to replacement cost,” said Turner. “The acquisition price of $98 per square foot is a 13% discount to recent transactions in this submarket and a 43% discount to the asking price for nearby comparable property.” Planned improvements will include roof, HVAC systems and parking lot upgrades. “This acquisition allows us to expand our total market presence in Denver to 430,000 square feet,” said Turner. “It also allows us to capitalize on our senior property manager’s direct experience with this asset, having managed the property for Kew for nine years.” BKM Capital Partners specializes in acquisitions and improvement of value-add light-industrial and multitenant properties in metro areas across the Western United States. Kew Realty plans to use proceeds of the sale to exchange into an office property, a company spokeswoman said.