The Deal Sheet
Legal cannabis cultivation is still in its infancy, but Advanced Cannabis Solutions CFO Christopher Taylor tells us that real estate investors who serve the industry—such as his company—are looking intensely for sites. The demand for facilities is insatiable at this point (no, we’re not going to make any cheap jokes about the munchies).
So far, Christopher says, ACS has acquired a three-acre site in Pueblo with a small existing industrial facility, where it plans to spend $2M expanding into state-of-the-art greenhouse space (behind the pictured building), which it will then lease to producers. That acquisition was made with funds raised from a convertible debt offering late last year, but more recently ACS obtained a $30M credit facility from Full Circle Capital. Armed with that kind of purchasing power, he says the company is actively pursuing a number of “large sites” in Colorado and other places (some states allow cannabis cultivation to serve medicinal marijuana markets).
The company's original plan was to focus on facilities in the Denver area, but that’s changed because the Denver industrial market is very tight, and properties are relatively expensive. The company will probably still acquire a few sites in Denver, but markets like Pueblo offer sites for lower prices, including those suitable for spec development—which the company also plans to do. “For cutting-edge greenhouse space, it’s often more practical to develop new than retrofit,” he says. The demand for the space is so strong that it mitigates the risk of spec marijuana facility development and makes it worth the effort to find jurisdictions that will permit the facilities (many will, but not everyone’s on board with the idea yet).
LEASING
Banker’s Bank of the West renewed and expanding its lease at Granite Tower in the Denver CBD, taking a total of more than 20k SF. The bank has been a tenant at the 562k SF LEED Gold tower since the building was developed; Granite Tower is currently 96% leased. Newmark Grubb Knight Frank’s Nathan Johnson and Pete Staab repped the landlord, KBS REIT, while JLL’s Mike Rooks repped the tenant.
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D.A. Davidson & Co, an investment banking firm, inked a lease for 25k SF at 16M, a 10-story mixed-use building at 16th and Market in LoDo that’s scheduled for delivery this summer. Quantum Commercial Group’s Michael Palmer and Howard Ecker & Co’s Solveig Lawrence repped the tenant, while Newmark Grubb Knight Frank’s Jamie Gard and Nathan Johnson repped the landlord, Integrated Properties. “It’s the coolest new building in LoDo,” Jamie tells us, with neighboring and in-building retail, underbuilding parking, as well as a fitness center and rooftop terrace.
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NAMJet leased 50k SF at 4959 Kingston St in northeast Denver, which will be its new HQ. Currently the company, which makes high-powered waterjets for boats, is based in Arkansas. According to the city, NAMJet will make a $4M investment in the Denver facility.
CONSTRUCTION & DEVELOPMENT
RTD FasTracks broke ground last week on the North Metro Rail Line, which is slated for completion in 2018. RTD contractor Regional Rail Partners will design and build the first 12.5-mile phase of the electrified commuter rail line from Denver Union Station to 124th Ave. The final six miles will be built as funds become available. Once complete, the line will run from downtown Denver through north Denver, Commerce City, Thornton and Northglenn to northern Adams Co. Snapped: a ceremonial “spike pull,” since you don’t want to break ground under a rail line.
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Brown's Compounding Center, a pharmacy that creates customized prescription medications, moved into its brand-new 38k SF facility in Parker this week. The facility, one of the largest of its kind in the country, will serve as the US HQ for Brown's. It includes a $2M clean room, which is a 7,000 SF aseptic lab for production of sterile medications. The new HQ draws 100% of its energy needs from solar power, enabling the lab to continue operations uninterrupted, even during local power outages.
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Work is under way on the Vehicle Vault at 18301 Lincoln Meadows Pkwy in Parker. The property will include a car museum, clubhouse, and “car condos”—garage-space condominiums, in other words. Daniel and Erin Dilley are the developers, with Kahn Construction as the GC. Farnsworth Group is the architect.
FINANCING
Capital Advisors has arranged nearly $10M in refi for the VA Denver Acquisition & Logistics Center, a 56k SF office/industrial property located at 555 Corporate Circle in Golden. The single-tenant property serves as the primary purchasing and logistics provider for all VA medical clinics and VA patients. Capital Advisors’ Cooper Willis arranged the 10-year loan, which includes 18 months interest only and a 30-year amortization schedule. The loan was arranged with a CMBS lender on behalf of Capstone VA Golden.
