Ex-State Farm headquarters sold by UNC

GREELEY — In real estate parlance, the University of Northern Colorado Foundation is a “motivated seller.”

The UNC Foundation expects to sell the former State Farm Insurance regional headquarters complex in Evans– donated to UNC two years ago — for less than $5 million.

That’s a deep discount from the recent asking price of $11.5 million, and well below the appraised value of $10.1 million applied to the facility by the Weld County assessor.

UNC Foundation president Jim Moore said the property, which includes a 230,000-square-foot building on 16 acres, is under contract. The deal is scheduled to close Nov. 18.

In early October, the UNC Foundation cut the asking the price on the property from $11.5 million to $5 million. But Moore said the sale price would be less than that.

“Recognizing the economy we are dealing with, we decided to lower the price and did so with the hope of being able to attract not just users but maybe some investors,” Moore said.

He declined to identify the buyer, but said the new owner’s intent “is to get some new leases in there and hopefully bring some new jobs to Greeley.”

Another source familiar with the deal said the would-be owner is a Colorado-based investor with a track record of redeveloping buildings for multiple office tenants.

The UNC Foundation appeared to have little choice but to put a clearance price on the property.

State Farm, which has relocated its regional offices to the Promontory business park in west Greeley, has been leasing the facility for the past two years. The lease payments have defrayed the carrying costs – maintenance and taxes — of the property.

However, State Farm’s lease expires Nov. 19. After that, the UNC Foundation becomes responsible for carrying costs that Moore estimates at $600,000 per year.

At that rate, the donation value of the property could quickly turn from an asset to a liability.

“We would love to have been able to get what the facility was appraised at,” Moore said. “Understanding the changes in the economy, we certainly are very appreciative of anything.”

The proceeds from the sale have already been earmarked by the UNC Foundation. The school’s athletic department will get 45 percent of the money. The UNC Kenneth W. Monfort College of Business will receive 40 percent. The balance will go toward an endowed faculty position in real estate development.

The State Farm facility, at 3001 Eighth Ave. in Evans, was built in 1963. Since then, State Farm expanded and building several times, most recently in 1998. When State Farm moved, the developer of Promontory took over the property and made the donation to UNC.

State Farm has moved its entire staff out of the building but has continued to use the site for storage.

In the interim, UNC decided it couldn’t make use of the building for school purposes. UNC would have been exempt from paying taxes on the facility if it was used for academic reasons.

“Initially, that was explored,” Moore said. “But we’ve got a building on campus that’s currently empty right now. I don’t know if that was a space (the State Farm building) that was ever going to be suitable for academic purposes.”

The empty building on UNC’s campus is the former University Lab School complex, which was vacated two years ago.

UNC’s inability to get the appraised value for the property matches the frustration experienced by the owners of several large commercial properties in the Greeley area.

Hewlett-Packard Co., which vacated its 350,000-square-foot complex in west Greeley earlier this year, was forced to drop its asking price from $18 million to $14 million. Another significant facility lingering on the market is the former 42,000-square-foot Sykes building, 1450 Sykes Ave., vacant nearly two years.

“There are a lot of superior properties in the market in Greeley,´ said Mark Bradley, a broker with Realtec Commercial Real Estate Services Inc., explaining why the old State Farm property couldn’t command a premium price. “They’re also completing with a lot of vacant buildings in Denver.”

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