Year in review: Commercial real estate

The opening of Bass Pro Shops’ local store also meant the first major presence for the Copper Ridge development.

The opening of Bass Pro Shops’ local store also meant the first major presence for the Copper Ridge development.

Commercial real estate

The past year has brought optimism. Vacancy rates are down across the board, supply and demand are beginning to turn the economic tide and the year has been marked by several newsworthy transactions. These pieces highlight some trends and shine light on the underpinnings of a few of Colorado Springs’ most lucrative deals.

 

November 22

Copper Ridge building steam as Bass Pro finally opens its doors

After nearly two years of anticipation, it’s finally here. Outdoor retailer Bass Pro Shops opened its 62nd location to much fanfare at the Copper Ridge at Northgate development in north Colorado Springs.

At the 6 p.m. grand opening of the state’s second Outdoor World, notable figures including company founder Johnny Morris, Duck Dynasty star Willie Robertson and Santa Claus showed up along with a crowd of shoppers to tour the sprawling 120,000-square-foot store.

The new location has the traditional Bass Pro trimmings — hundreds of taxidermy specimens, lodge-like decor and all the bullets money can buy — as well as a few exclusive features. The building, which sits southeast of Interstate 25 and Northgate Boulevard, also houses Uncle Buck’s Fish Bowl and Grill, a 15,000-square-foot, aquatically themed restaurant with 12-lane bowling alley, bar and billiards room.

“It’s quite an attraction at other stores, and it’s guaranteed to be one here as well,” said General Manager Chris Koeninger, who came from another location near Tulsa, Okla., to get the store up and running.

The west-facing main entrance, which opens to panoramic views of the Front Range, is landscaped with cobblestone sidewalks and a gushing waterfall that flows into small streams and ponds below.

The interior is also accented with nature-inspired installations, including large murals of Pikes Peak and Garden of the Gods, and a 27,000-gallon aquarium fed by waterfall.

“One of the things that I think sets us apart from other retailers in the area, as well as our own stores, is the amount of imagery we have,” Koeninger said. “Our waterfall that flows into the aquarium was actually inspired by Seven Falls, and we have over a dozen species of fish that are all native to Colorado.”

Work at the 200-acre site began with approval by Colorado Springs City Council in 2010, which designated the site as an urban-renewal area, making tax increment financing available.

Until the deal with Bass Pro was announced last February, developer Gary Erickson had difficulty finding a big-box establishment with which to entice other tenants. But he said that the complex is starting to fill out.

Currently in the works are businesses including Jimmy John’s Gourmet Sandwiches, Baldwin Liquors, Interstate Batteries, Loaf ’N Jug, Orange Leaf Frozen Yogurt, CB & Potts, Colorado Grand Resort and Hotel, and Bourbon Brothers Smokehouse and Tavern, which is slated for a January opening.

Also moving in next to Bass Pro is a 30,000-square-foot facility, Magnum Shooting, which Erickson said is expected to open in summer 2014.

October 11

Promenade Shops sold to national investor

In a hushed real estate deal, an Illinois-based investment group purchased the high-end and successful Promenade Shops at Briargate in August for more than $96 million.

“I have been thinking on and off for five years about this particular asset,” said Andrew Miller, president and CEO of Miller Capital Advisory Inc., which co-owns Skokie, Ill.-based property buyer Institutional Mall Investors LLC. “It just came about this year, and we found a way to make a transaction work in both [the seller’s and] our best interests.”

Documents from the El Paso County Assessor’s Office indicate that the 29.17 acres of partially developed land located along Briargate Parkway, which includes the 231,847-square-foot shopping center, sold Aug. 16 for $96.8 million. Although Miller said his company wasn’t looking specifically at Colorado Springs for an investment opportunity, the population growth and steady economy of the Pikes Peak region made the asset stand out in a part of the country he was eyeing.

“We’re an investor in fashion retail properties; sometimes it’s malls, sometimes lifestyle centers like this one,” Miller said. “We have desired a position somewhere along the Front Range for some time.”

Institutional Mall Investors, a co-investment venture between Miller Capital Advisory and the California Public Employees’ Retirement System, has a portfolio of assets including nearly 20 million square feet of retail space and more than 1 million square feet of prime office space across 16 different states, according to MillerCapitalAdvisory.com. This is the group’s first property in Colorado.

“CalPERS is huge,” said UCCS Economics Department Chairman Dale DeBoer. “That’s going to be one of the biggest investors in the country. They buy all kinds of things all over the world, because they’re just too big not to.”

Miller’s comments supported DeBoer’s assessment.

“We are a very, very deep-pocketed investor,” Miller said, adding that its combined property holdings are worth more than $5 billion.

 June 7

Pinery empire climbs Bijou Hill

In a matter of months, the Pinery at the Hill has transformed from a blighted empty old building atop West Bijou Street into a behemoth two-story structure where couples will wed in front of a downtown Colorado Springs backdrop.

The 24,000-square-foot, $13 million facility will specialize in full-service, all-inclusive weddings and events. Parties were booking the venue for dates as early as the end of September.

“But that’s only part of the story,” said majority owner Mitch Yellen. “There’s so much more. This almost didn’t happen.”

Yellen and his wife bought the former hilltop restaurant at 775 W. Bijou in 2007, intending to turn it into a wedding and event venue. Yellen had plans for a single-story, 13,000-square foot facility ready for development. Investors had committed $7.5 million.

Yellen, not a traditional financial planner, says a lot of accountants and financial planners don’t like him and disagree with his methods. But he has several local high-wealth investors working with him, mostly doctors and lawyers.

“Most people’s retirement investments have been flat or down from 1999 to now,” Yellen said.

Instead of mutual funds, he advises clients to put their money in self-directed IRAs and invest them in projects like his Pinery. Yellen is 51 percent owner, and 26 other investors, 21 using self-directed IRAs, own the other 49 percent.

“It’s that way because you can’t have 27 chefs in the kitchen,” he said. “It doesn’t work.”

Soured on partnerships in his mid-50s, Yellen has decided this strategy works. There is no bank debt, reducing investors’ risk. He makes decisions and sees his vision through.

“I’m a guy who gets things done,” he said.

Now that the Bijou location is established, Yellen expects it to generate $7 to $10 million a year in revenue. Combining all of the Pinery’s holdings, he says revenue could top $20 million a year.

October 18

Local investors buy Garden of the Gods Club

The Garden of the Gods Club announced that a local investment group led by two local women purchased the facility, which had been on the market since June.

Brenda Smith and Judy Mackey closed the deal Oct. 15, returning the club to local ownership for the first time since 2007.

Smith and Mackey declined to disclose how much they paid for the club, which was listed for $14 million in June. Among plans the new owners have for the sprawling mesa grounds is to establish a spa and wellness center that will “treat mind, body and soul,” Mackey said.

“We’re looking at more of a proactive program, using an integrative approach — with both traditional medicine and non-traditional or Eastern medicine,” she said, adding that the center will offer acupuncture therapy, natural pathology treatments and other services.

Mackey said that renovations to accommodate the new facilities will cost an estimated $6 million. She hoped the design phase would be done in November and the facilities could be open as soon as late 2014.

The buyers — Smith, COO of the Evangelical Covenant Order of Presbyterians, and Mackey, president and CEO of Benefit Services Group Inc. — are joined by investors including Kathy Loo, Susan Pattee, Martha and Marvin McMurrey and Lyda Hill, daughter of club developer Al Hill.

Mackey said she and Smith have known each other for 25 years but that this is their first business dealing.

The property includes a 43,000-square-foot main building, a 27-hole golf course with 31,500-square-foot clubhouse, and an 83-room lodge with spa, salon, fitness center and other amenities.