Baseline West Development

Investor’s Return A Shares: 10%
Investor’s Return C Shares: 14% annual
Acquisition Price $6,375,000 (December 2008)
Disposition Price: $9,000,000 (January 2017)
Hold Time: 8 Years, 2 Months

In December of 2008, Baseline West was purchased (along with Baseline East) as a re-development project in Boulder, Colorado.  The site was comprised of five parcels initially with a sixth parcel acquired several years later to complete the assemblage.  The six sites made up a total of 3.097 acres and were located just west of U.S. 36 on Baseline Road.  There were 6 tenants in approximately 11,306 square feet, mostly in single tenant buildings that were outdated and approaching the end of their useful lives; however, the location was arguably one of the best development opportunities in the City of Boulder due to the close proximity to the University of Colorado, student housing and tremendous traffic counts.  The site is located at the on / off ramp to the Boulder Turnpike, which serves as the major highway system linking Boulder to the neighboring communities.

Signature Partners, through its Investor relationships, was successful in raising $2,625,000 (A Shares) in initial equity to capitalize and participate in this joint venture with Jim Loftus of Loftus Developments, Inc. and Bruce Dierking of Circle D, both of whom have been development partners in other investment ventures over the years.  Jim , a leading developer in Boulder County for over 30 years, and Bruce , a talented and successful attorney and developer, have a track record of many successful marquee developments in Boulder.  Bruce and Jim approached us after placing the properties under contract to raise the majority of the equity and participate with them in the redevelopment effort.  The four of us combined to provide a strong, experienced and hard working Development Team.

At the time of acquisition, five of the six buildings on the West side were leased with Landlord termination rights, which provided a cash flow that managed the hold costs while in the entitlement process.  In 2012, we were faced with a situation where our lender was taken over by the FDIC. It was determined that the investment would best be served if we paid off the FDIC and brought in a second round of funding (C Shares), thus creating a new class of Investors in a primary position.  While it was anticipated that the West side entitlements would be completed in 2012 – 2013, the City of Boulder imposed a height moratorium that put the project on hold for the foreseeable future due to the fact that we could only construct a two story structure with the moratorium in place.  With the project now delayed, we sought alternatives to accelerate the development that would generate a satisfactory yield for the investors.  Ultimately, we decided to seek a replacement investor that had the time and energy to go through the City of Boulder process and see the project to the finish line.  In mid-2016, the investors were presented with an opportunity to sell their interest to an apartment developer.  After an exhaustive due diligence process, the property closed in early 2017 at a price that gave the first round investors a 100% return of their equity plus approximately 10%.  The second round investors received 100% of their equity plus a 14% annualized return.