Samsonite Campus Under Contract at $14M

Panattoni, based in Sacramento, agreed to pay $14.2 million. The agreement provides for a due diligence period of 30 days with a closing by March 1. At closing, Samsonite will lease back under full net leases a warehouse, retail store and corporate office for two years with options to extend the leases, excluding the retail space, for an additional two years.

The combined annual cost of the leases for the initial two-year leaseback period is approximately $1.8 million. Under the agreement, an escrow will be established of $419,000 to pay asbestos abatement costs on the property in excess of $781,000 but less than $1.2 million. Panattoni Development is obligated to pay all other environmental remediation costs on the property.

Neither Panattoni nor Samsonite would comment on the deal. The broker on the deal, contacted by GlobeSt.com, also declined comment.

But the deal has caused a stir in real estate circles. "It's a big deal for Denver," veteran CB Richard Ellis industrial broker Jim Bolt tells GlobeSt.com. He says it will be interesting to see how many buildings Panattoni will scrap and replace and how many it will keep.

"There's 4.3 million sf of land, and that comes to $3.50 per sf, just based on the ground," Bolt tells GlobeSt.com. "That is real high, so they must be attaching some value to the buildings. For a 100-acre site, you really need to get down to $2 to $2.50 per sf for the ground. The site has one million sf of building, so that comes out to $14 per sf. That is low. But most they're obsolete buildings."

He says he expects Panattoni will keep a 200,000-sf warehouse and eventually raze all of the other buildings, including the corporate office, the retail center and a former manufacturing facility. Samsonite, which owns American Tourister and other brands, makes most of its luggage in Mexico and the Far East.

"If that building is worth $30 a foot, that's $6 million off the top, which is a cost of $8 million for everything else," Bolt says. "So then you're really getting there. And it's a great site, with high visibility."

Kirk Vanino, an industrial broker with Cushman & Wakefield, says the Samsonite site was coveted by a lot of developers. "The question was paying for it," Vanino tells GlobeSt.com. "When you look at the demo costs, it looks like they are paying a little on the high side. But if the deal closes, it is going to work out fine for them. It's a great infill site, with high visibility along I-70. Anyone would love to own it. It's going to be a great long-term buy for those guys."