A property in the heart of Cherry Creek has sold for the first time in six decades, although the buyer doesn’t own the building that sits on it.
Sheridan Venture Capital LLC, led by John Sheridan, purchased the 3,960-square-foot lot at 2826 E. 3rd Ave. earlier this month for $1.9 million, or $480 a square foot, according to public records.
The 4,063-square-foot building on the lot is occupied by Adornments boutique and Cherry Creek Framing. But the structure is owned by another party, which has a ground lease for the property that dates to the 1960s. That lease runs until 2031.
“The building will revert to the landowner upon expiration of the ground lease,” said Unique Properties broker Brett MacDougall, who represented the seller in conjunction with colleagues Michael DeSantis and Hudson Cramer.
Sheridan told BusinessDen he felt he got a good price, given that Cherry Creek has seen multiple land deals this year north of $1,000 a square foot, including the August sale of the former Bombay Clay Oven site.
“It’ll appreciate over time, and it’s core dirt,” Sheridan said.
The 3rd Avenue property is zoned for up to five stories. Sheridan said that, when the ground lease expires, he expects to redevelop the site with a residential project, potentially for personal use.
Sheridan said he doesn’t expect to be able to redevelop it in conjunction with another parcel, because the natural option would be 299 Fillmore St., where the parent company of sushi restaurant Uchi has signed a long-term leaseand is expected to invest significantly on its build-out.
“I’m kind of boxed in, but it works fine,” Sheridan said.
Sheridan is an active property owner in Cherry Creek. He recently transferred ownership of the building at 240 Milwaukee St. to developer Matt Joblon in exchange for a stake in Joblon’s planned office building at the site. He was also part of entities that owned the former church at 50 S. Colorado Blvd. and the office building at 155 Cook St., both of which have sold in the past year.
The land was sold by Third Avenue Trust. It last changed hands in the 1960s, around the time the ground lease was signed. MacDougall said the family behind the trust is split between Colorado and the East Coast, with the decision maker not living locally, and opted to sell while the market was still hot.
“There’s eight parking spaces at the property, which is ultimately one of the big drivers for the buyer, because parking in Cherry Creek is so hard to come by,” MacDougall said.
Ground leases are relatively rare but not unheard of in the Denver metro area. The developer of new downtown skyscraper Block 162 has a ground lease for the property it sits on, and the Denver Broncos leased the land under their headquarters in Arapahoe County for decades until the team’s new owners bought it weeks ago.