545 South Jason Street
- 545 South Jason Street, Denver, CO 80223
- Property Type:
- Multi Tenant
- Cap Rate:
- 4.00% cap
- Square Feet:
- 13,125 sqft
- Lot Size:
- 0.5 acres
- Price Per Square Foot:
- Year Built:
- Shallow Bay Multi-Tenant Industrial Building
- 13,125 Square Feet Divided Into Seven Units With Individual Entrances and Drive-In Doors
- Masonry Construction Delivered in 1969
- Below Market Rents With Short Term Leases Allow For Value Add Opportunity
- Located Near I-25 And Santa Fe Drive For Easy Highway Access
- 50% of Tenants Have Been In Place For 10 Years
Marcus & Millichap is pleased to present the opportunity to acquire the property located at 545 South Jason Street in Denver, Colorado. The subject property consists of approximately 13,125 square feet of warehouse space and is situated on 0.5 acres of land. The small bay asset features masonry construction divided into seven units, with individual entrances and drive-in doors. Half of the tenants have been in place over the last decade. The multi-unit property consists of below market rents with short term leases, allowing for an up-lease opportunity. Delivered in 1969, the property is located within the Upper South Central submarket near Interstate 25 and Santa Fe Drive for easy highway access.
Upper South Central is a midsized submarket containing about 4.6 million square feet of industrial space. Like the Denver market, logistics facilities make up most of the inventory at 3.3 million square feet, followed by 1.1 million square feet of specialized space and 210,000 square feet of flex space. Over the last five years, the vacancy rate has largely fluctuated within a tight range of 2 to 4 percent, falling to 2.4 percent during the second quarter. A low vacancy rate has helped push rent growth up to 3.2 percent over the past 12 months. Average industrial rents in Upper South Central are priced at $10.97 per square foot, which is just over 7 percent higher than the metro average. However, logistics facilities in the submarket command an 18.5 percent premium over the Denver market at $10.90 per square foot. With no industrial properties under construction, there are no supply-side pressures on vacancy or rent in the near-term. During the last decade, the inventory has actually contracted as demolition activity has outpaced new construction (CoStar). Upper South Central’s low vacancy rate and strong rent growth offer robust fundamentals for industrial investors.
A confluence of events turned Denver into one of the most active industrial markets in the country in the past decade. Robust demand in this regional market with strong economic growth this cycle is stemming from the growth of retail sales, employment, and industrial production in the metro area and the greater Colorado region. Furthermore, the emergence of the marijuana industry’s presence with the passing of Amendment 64 in November 2012 created a new demand driver this cycle, with new and relatively unsophisticated tenants operating with entirely different profit margins. Vacancies were below the long-term average even after 2019 shattered records with more than six million square feet of deliveries. Entering 2020, around 5.5 million square feet was under construction. Industrial rents are more than 60 percent above the peak of the previous cycle, one of the best performances in the nation. Investors remained enthusiastic about Denver’s industrial fundamentals by setting a record high for sales volume for the second straight year. More than $1.7 billion worth of assets traded in 2019, more than $200 million more than the previous year. Pricing continues to climb upward, albeit at a more modest pace than in past years, according to CoStar’s Pricing Trends (CoStar).