Case Studies

In March of 2017, Northstar bought 860 Potomac, a 113,568 SF property built on 5.24 acres just east of Denver, in nearby Aurora, Colorado while it was 100% vacant. A number of people thought it would be challenging to lease-up this unoccupied asset. However, we liked the opportunity for four primary reasons.

• It was a Class B building in a Class A location.
• The price of the property was far below replacement cost value. We were able to purchase it for $5.3 million (approximately 25% of replacement cost).
• The building was in relatively good condition.
• The location was ideal for a medical office tenant. Specifically, the property was less than 1 mile from the $5 billion Fitzsimons Medical Campus. Additionally, the property was located on I-225 with exposure and signage – one of the area’s major thoroughfares.

In less than two years we accomplished a number of things:

• We budgeted more, but ultimately only invested about $2 per square foot in improvements. We repaired the fire system, elevators, HVAC system and improved the landscapping and common area.
• We then began an aggressive marketing campaign and leased the property to 100% occupancy to Children’s Hospital Colorado.

We were thrilled to announce to investors that we sold Potomac to an institutional-grade investor for $34.75 million. For our equity investors, this represents a 3X return on their original investment, and over a 101% IRR!

Denver-West, LLC acquired a two building office complex located in the prestigious Denver West Business Park. The buildings are comprised of ±151,119 SF of Class A office space. The purchase price of $11,475,000 was less than 38% of its replacement cost value of $30,000,000. The property has been 100% leased to two tenants, and was purchased at an 18.3% cap on the existing in-place Net Operating Income of ±$2,100,000. This is an institutional grade asset that was acquired at fantastic opportunistic-level pricing. Though investors may be able to acquire assets for 70% or less of replacement cost, rarely can they acquire a 100% leased asset that produces strong NOI at 38% of replacement cost in a market with sub 3% vacancy.  One of these buildings is occupied by the Boston Market’s Headquarters.  The other buildings is occupied by Safe Co and Liberty Mutual Insurance.

3190 S. Vaughn, LLC acquired a six story, multi-tenant office building. This asset was acquired for $4,600,000 ($23/SF), which is approximately 12% of its replacement value. It was purchased as a completely vacant asset, and Northstar secured eight tenants to occupy 94.5% of the building, which has significantly increased the asset’s value.  These tenants include ADT Security Systems, Nationwide Insurance, and the State of Colorado and they have brought over 1,000 jobs to the area. Upon full occupancy, the projected, stabilized value is ±$25,000,000 ($123/SF). In August of 2018, the asset was sold for $39.7 million, giving investors a healthy return on their investment.

West Point Investment, LLC acquired an eight story, multi-tenant office building. This asset was acquired for $5,250,000 ($31/SF), which is approximately 17% of its replacement value.  It was purchased in October 2012 at 25.68% occupancy from a lender who had foreclosed on the asset, and with Northstar’s aggressive lease-up strategy the property has reached 89% occupancy. Northstar is negotiating leases with multiple tenants to continue increasing the tenancy, and thus, the value of this asset.  In addition to improving the asset, Northstar has created a multitude of construction and engineering jobs with this investment.

1601 Gillingham, LLC acquired a state-of-the-art, Class A industrial warehouse and distribution center near Houston, Texas. This property was 100% vacant when purchased as a severely discounted, distressed asset acquired from a regional bank at approximately 65% of its replacement cost value. The building is currently 84.57% leased, with a pending long-term lease for 53,000 SF which would bring the property to 100% occupancy. This asset is considered one of the best warehouse buildings in the entire Houston marketplace.

NCP 2007 Houston, LLC acquired two industrial buildings in Houston, Texas. Upon its acquisition, Northstar performed renovations on both buildings, and sold Building II (±58,464 SF on ±22.56 acres) to a user/owner. Building I (±201,750 SF on 12.51 acres) was later sold as a long-term, cash flowing asset.

4038 Dover, LLC acquired this 100% leased asset for $2,300,000 ($9.27/SF), which was approximately 13% of replacement cost. The asset was successfully sold for ±70% Return on Equity.