Belmar has a new owner with plans to “increase the vibrancy” of the shopping center that serves as the de facto downtown of Lakewood.
Seattle-based real estate investment firm Bridge33 Capital purchased the retail and office district that spans multiple blocks near the southeast corner of Wadsworth Boulevard and Alameda Avenue on June 28.
“We’re going to bring Belmar back and make it the great property that it was envisioned to be,” company co-founder and Managing Principal Jahan Moslehi told BusinessDen in an exclusive interview.
Belmar opened in 2004 on the former site of the Villa Italia mall, which had closed several years earlier. Its largest retailers include Target, Nordstrom Rack, Dick’s Sporting Goods and Best Buy. There’s also a 16-screen Century Theatres.
Jack Hechinger, Bridge33’s vice president of acquisitions, said the firm paid $113 million, although some concessions on the seller’s side effectively brought that down to about $110 million.
Belmar was sold by Belmar Commercial Owner LP, which is affiliated with Chicago-based Starwood Retail Partners and its Miami-based parent company Starwood Capital Group. The entity purchased it in 2015, paying between $250 million and $300 million, according to news outlets at the time.
The entity entered the foreclosure process in October, according to the Jefferson County Public Trustee’s office. At the time, the entity owed $108.8 million on a 2015 loan of $111 million from Wells Fargo, records show.
The sale is part of a larger shedding of properties by Starwood Retail. On its website, the company now lists seven retail centers among its holdings — down from 27 in August 2020.
Hechinger and Moslehi said Bridge33’s deal included about 1 million square feet of retail and office space.
The sale did not include two vacant lots within the area, as well as 171 apartments, which continue to be owned by Starwood. It also did not include Target’s retail store, which the Minneapolis-based retailer owns, and a Hyatt House hotel owned by Denver-based Continuum Partners, which originally developed Belmar.
Bridge33 owns and manages properties in 18 states, according to its website. It has one other holding in Colorado, which it purchased in 2017: the 121,000-square-foot Fairways Plaza shopping center at the corner of County Line Road and Colorado Boulevard in Centennial.
Moslehi said the firm controls about 6 million square feet in total across its portfolio.
“Belmar is by far the largest project that we have bought, and it has the full focus of most of our senior management,” he said.
Hechinger said about 750,000 square feet of the 1 million square feet is retail, with the remaining used as office space, although he noted that can fluctuate.
The overall space is about 80 percent occupied, with greater vacancy in smaller units. That’s important in part because smaller tenants tend to pay more per square foot in rent, and because they can also contribute more to the sense of an area’s vibrancy, Hechinger said.
In 2015, when Starwood purchased the property, the Denver Business Journal described the office portion of the deal as 100 percent leased, and the retail portion 96 percent leased.
Hechinger said Belmar has “been on decline for quite some time.” The pandemic played a role, as did bankruptcies among some national retailers. And news coverage of the recent foreclosure proceedings didn’t help either.
The pair said the decline in occupancy allowed the Bridge33 to get in at an attractive price — the cost to build something similar would be at least $300 a square foot, he estimated — and gives the firm “a little more of a clean slate.”
“Continuum, who is the developer, built a fantastic project,” Moslehi said. “I don’t want to speak for them. But it was probably built a little before its time, and it was probably overbuilt. But I think things are catching up.”
Moslehi noted Denver’s western suburbs are becoming more affluent and populous, and indicated he’s not willing to concede the best tenants to markets like Cherry Creek and the southern suburbs.
The firm has hired JLL brokers Sam Zaitz, Adam Rubenstein and Sarah Alfano to handle leasing.
“Bridge33 is going to go after some of the best, most exciting tenants, whether it’s restaurant or retail … and that is going to build on itself,” Moslehi said, adding he wants to attract visitors “from all over.”
Moslehi said the company doesn’t have any immediate plans to build new structures on its holdings, which include sizable surface parking lots. And he said the company isn’t looking to flip the property after filling vacant units.
“We are thinking very much long term about this asset,” he said.