Jan 18, 2024

Blue West Capital Facilitates Off-Market Sale for Redevelopment

by Avalon Jacka, CREJ

DENVER – A multi-tenant office building will be redeveloped for a single national tenant after trading hands for $2.13 million. Brandon Gayeski of Blue West Capital represented the buyer and seller in the sale of 494 Sheridan Blvd. Both the buyer, a Denver-based developer and repeat Blue West client, and seller, a local private investor, were undisclosed. The property was sourced off-market by Gayeski as a value-add investment property.

In 2021, the buyer was actively engaged with a national tenant exploring a location in this specific area, but the area had limited sites available that were suitable for this user, Gayeski said. The buyer successfully went under contract for the 0.72-acre site that year. However, the closing process had its share of obstacles, including delays and challenges with the city and structuring tenant leases to allow for post-closing redevelopment, Gayeski noted.

The 17,042-square-foot building, constructed in 1974, is currently leased to 17 tenants occupying a total of 31 units. All tenants either have month-to-month leases or language favorable to the owner for redevelopment in their lease agreements. “Overcoming challenges posed by the city related to a land use change and strategically structuring tenant leases to allow for post-closing redevelopment required a collective effort from all parties,” Gayeski said. “The collaborative work of everyone involved in navigating these challenges ultimately led to the successful closing of the property.”

The property is situated at the signalized intersection of Sheridan Boulevard and West Fifth Avenue, providing visibility to 55,000 vehicles per day. It is a block south of West Sixth Avenue, with traffic counts of more than 130,000 vehicles per day. Approximately 4 miles southwest of Denver, the infill property is located in a densely populated area with more than 175,000 people living in a 3-mile radius.

Properties located at signalized intersections along major thoroughfares like Sheridan Boulevard in the Denver metro area are highly sought after among developers seeking infill redevelopment opportunities, a Blue West statement said. The sites can drive aggressive pricing, providing property owners with an opportunity to realize substantial appreciation,the statement noted.

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