LONGMONT — In what may be the largest real estate deal of its kind in Colorado this year, Pratt Properties has sold 2 million square feet of its commercial property portfolio for $142 million.
The buyer is Denver-based Circle Capital Partners LLC.
At $71.50 per square foot, the sale sets a national record for similar transactions of more than 1.5 million square feet, according to New York City-based Broad Street Advisors, which handled the transaction.
“We think this is a win for the community,” Susan Pratt said Thursday in her office. “These people are more experienced than we are, (and) bring good solid values to the table. They’ll do an excellent job.”
The sale covers approximately 45 buildings, the largest of which, at 450,000 square feet, houses hard-drive maker Maxtor. Several other publicly traded companies are tenants, including Texas Instruments, AMD, National Semiconductor and Array BioPharma. Two years ago, Front Range Community College relocated and consolidated its Boulder County headquarters in the Pratt office park.
A small handful of office buildings, the Radisson Hotel and Conference Center, the Hawthorn Suites hotel and the 5-acre property where The Silo Restaurant & Sports Bar is located were not included in the sale.
The property sold is about 65 percent occupied, and represents roughly one-fifth of the total office/industrial space in the Longmont area.
“It’s big news across the country because it’s a large portfolio, and you don’t find these every day, with the quality of the construction of the property and the quality and diversity of the tenants in there,” said Terry Fitzpatrick, one of the two principles of Circle Capital. “That’s why we were so excited.”
Dallas-based Invesco Real Estate joined with Circle Capital as a silent partner on the purchase.
Fitzpatrick said Circle Capital will have an office in Longmont. He and his partner, R. Randall Clark, bring more than a half-century of real estate experience with them.
Fitzpatrick was a co-founding partner of Denver-based Pacifica Holding Co., which at one time held and managed more than 10 million square feet of office, industrial and retail space throughout the region. Clark was a founding partner and managing director of Cherokee Investment Partners, the company that redeveloped the former Gates Rubber Co. property in Denver.
“This company has the resources to be aggressive and flexible, and in this market that’s what’s necessary to make deals happen,” said John Cody, president and CEO of the Longmont Area Economic Council. “Their contacts within the metro brokerage community will be a definite plus.”
Pratt first contacted New York investment house Morgan Stanley last year about selling the properties. Morgan Stanley brought in Broad Street Advisors to broker the deal. Circle Capital was one of 144 entities that expressed interest in buying.
“We got wind of it about mid-September, first of October,” Fitzpatrick said, when they acquired a copy of the sales kit Broad Street had put together for prospective buyers.
“Randall and I jumped into the car and saw Pratt for the first time, and that’s where our level of excitement really jumped up,” he said, adding that the two were impressed by several aspects of the properties, including details like the landscaping and the exercise paths that wound through the park.
“No developer today can afford to put in concrete parking lots — it’s just too expensive,” said Fitzpatrick. “Ken Pratt had such foresight.
“The quality and the cost that went into those buildings — the rock face goes all the way around to the loading dock. It wraps the building. Developers don’t do that anymore.”
He said he and Clark were also acutely aware that the Software & Information Industry Association has ranked the Longmont-Boulder area No. 1 in the country for five straight years for software employment nationally.
“We were already aware of the heartbeat that the flex space had in Longmont,” Fitzpatrick said. “They were aware of it around the country.
“I was in Raleigh, N.C., three months ago and I was mentioning the Pratt properties, and they knew about it down there.”
Pratt said Broad Street and Morgan Stanley handled the sale much differently than a traditional commercial real estate deal, given its complexity. She was hoping, however, that even though the search for a buyer was being conducted nationally, someone from Colorado would at least be in the running.
Colorado suitors, though, were worried that the area’s reputation might work against them.
“We were nervous because of what this park had to offer,” Fitzpatrick said. “We were worried that once the national boys came in, because there’s so little of this type of quality out there, that we were going to have a tough time competing.”
But after a face-to-face meeting with Pratt, both sides decided they had found the match they were looking for.
“We had probably a six-month relationship with Susan, and my respect for her is over the top,” Fitzpatrick said. “She’s one of the most professional businesspersons I’ve ever dealt with.”
Pratt said she was surprised at the wide interest the properties attracted and couldn’t be more pleased about the buyers.
“They were selected based on our values, which says they have values,” she said. “They understand that they become a big property owner in this community, and they understand they’re going to be a big part of this community.”
Cody, whose organization’s mission is to attract companies to Longmont and retain those already here, said having in-state buyers is a big advantage.
“The advantage that a Colorado player has is that they understand the market better,” he said. “Especially these guys — they understand the market.”
Susan Pratt has owned and managed the family business since her husband, Ken, died in 1995 at the age of 53. Ken Pratt’s ancestors first opened a real estate office in Longmont in 1912.
At 57, Susan Pratt said retirement really isn’t an option for her. She has been deeply involved in the Longmont community since she married Ken in 1980, and she plans to stay involved and will continue to help the Longmont business community grow and prosper.
“I’ve had a lot of people ask me, ‘What are you going to do?’ Like there’s nothing to do,” she said. “I have a new answer for that: I’m in the business of assessing opportunity. That’s the business I’m in today.”
And with the sale now final, Pratt said the thing she’ll miss most is dealing with her former customers, some of whom have been tenants for decades.
“As this process came to a close they began to find out what was going on,” she said. “I guess I would say that it has always been an honor and a privilege to serve these people, and this experience has only deepened that honor.”
Tony Kindelspire can be reached at
303-684-5291, or by e-mail at firstname.lastname@example.org.