Stacy Court Building
505 Stacy Court, Boulder, CO

Investment Summary
Investor’s IRR: 17.65%
Initial Equity: $250,000
Acquisition Price $850,000 (October 1997)
Disposition Price: $1.295M (October 2009)
Hold Time: 144 Months (12 years)
CAP Rate at Purchase: 9.35%
CAP Rate at Sale: 8.45%

In September 1997, 505 Stacy Court was purchased for $850,000 with a group of local investors. Located in Lafayette, Colorado just off HWY 287 and South Boulder Road, the 13,650 square foot industrial building was built for and occupied by Boulder Blimp Company, a boutique advertising company with local credit that had been successfully doing business in Boulder County since 1980. Boulder Blimp ended up downsizing slightly in 2000 leaving around 1,950 square feet vacant. This allowed us to sign a long term lease with the Boy Scouts of America, thus diversifying the single tenant asset. After a successful twelve year hold (and with seven years remaining on the Boulder Blimp lease), we concluded that the asset had maximized its return on capital and that the upside had been fully realized. It was determined that as the lease inched closer to its expiration, the sales price would be negatively impacted and that we had reached the optimal time to sell (furthermore, the market cap rates for this type of property were starting to climb in late 2009 and were predicted to slide even further over the coming years as the economy fell into a recession). We were successful in selling the asset to a local investment group in October of 2009.