August 5-August 18, 2015 —
COLORADO REAL ESTATE JOURNAL
— Page 33
Office
by Jill Jamieson-Nichols
A trophy mixed-use property
on the 16th Street Mall in Lower
Downtown Denver sold in an off-
market transaction.
LaSalle Investment Manage-
ment bought 16M, a 10-story
building that combines street-level
retail space with Class AA office
product and36 luxuryapartments,
from a group led by Integrated
Properties, the principal investor
in the building. The price was nei-
ther disclosed nor recorded.
LaSalle Managing Director
David Schreiber said, “16M is
one of a few exceptional LoDo
assets we’ve targeted for acquisi-
tion given its first-class profile and
product mix, strong tenancy and
prime location at 16th andMarket.
We remain bullish about down-
town Denver given its diversi-
fied economy, young and highly
educated population and lifestyle
advantages. In addition, the city
has made an ongoing commit-
ment to transit-oriented infrastruc-
ture investment, which will help
continue the strong growth we’ve
seen throughout Denver.”
Schreiber added that, “The
amenity-rich, mixed-use vibrancy
that continues to shape the LoDo
submarket creates valuable syner-
gies across property types, benefit-
ting both investors and users, and
we believe the best LoDo assets
shouldoutperformthewidermar-
ket given these unique attributes.”
The LEED-certified property
houses the regional headquarters
of Morgan Stanley, D.A. David-
son and The ONE Group, which
operates upscale, high-energy res-
taurants and lounges. STK Rebel,
an upscale, trendy steakhouse
similar to STK but with a broader
menu and greater focus on lunch,
will open its first U.S. restaurant
at 16M, which contains a Panera
Bread and Garbanzo Mediterra-
nean Grill on the 16th Street Mall.
“We are very pleased that
LaSalle found 16M to be the type
of urban mixed-use develop-
ment that will enhance the com-
pany’s already stellar portfolio,”
said Bruce Deifik, president and
founder of Integrated Properties.
“Properties that provide multiple
uses, such as 16M, continue to
grow in popularity, and we’re
happy that LaSalle saw the value
in ours.”
The 189,284-square-foot build-
ing, which includes three levels
of underground parking, has five
stories of office space, apartments
on the upper four floors, a rooftop
deck and state-of-the-art fitness
center. There are three levels of
underground parking. The occu-
pancy wasn’t released, but CoStar
Group lists office availabilities of
about 10,000, 20,000 and 31,000 sf.
CBRE negotiated the sale of the
property.
A subsidiary of JLL, LaSalle
Investment Management is a
global real estate investment man-
ager with approximately $56 bil-
lion in assets under management.
It represents public and private
pension funds, insurance compa-
nies, government entities, corpo-
rations, endowments and private
individuals.
s
CoStar Group
Located at 16th and Market streets in Lower Downtown Denver, 16M
combines office and retail space with 36 luxury apartments.
by Jill Jamieson-Nichols
A 1980s office park whose
occupancy climbed from 66 to
99 percent over the last five years
sold for $6.6 million, or $73 per
square foot.
Dayton Office Park, a 90,300-
sf multitenant property at 6535,
6565 and 6595 S. Dayton St. in
Greenwood Village, sold to M.
Karen Christensen. The seller,
Dayton Office Park LLC, had
improved the property and its
occupancy.
“The seller purchased the
property in 2010 and completed
numerous capital improvements
and common-area upgrades to
all three buildings while substan-
tially increasing the occupancy to
99 percent at the time of closing,
which was attractive to the buy-
ers and made the property a nice
turnkey investment for them,”
said Brandon Gouker, senior
adviser at Pinnacle Real Estate
Advisors.
Gouker represented the seller.
Fletcher Neeley of Pinnacle Asset
Real Estate represented the buyer.
Dayton Office Park’s larg-
est tenants include Intertel Inc.,
which occupies 6,261 sf; New
Wave Environmental Products
Inc., a 5,924-sf tenant; and Pac-
timo LLC, which leases 5,422 sf.
John Propp Commercial Group,
which also is a tenant, handled
leasing of the buildings for the
seller.
Dayton Office Park was built
from 1983 to 1985.
s
Dayton Office Park was 99 percent leased at the time of sale.
by Jill Jamieson-Nichols
Construction of new office
space in the Denver area soared
to 3.1 million square feet in the
second quarter, but the new
supply shouldn’t be cause for
concern, according to CBRE.
The new buildings will
increase Denver’s inventory
of office space by 3 percent. A
quarter of the space, or 779,785
sf, is preleased, with companies
looking to attract employees
and maximize their square foot-
age increasingly drawn to new
construction.
Downtown, where Hines
recently broke ground on a
640,000-sf skyscraper, 1144 Fif-
teenth, will see the bulk of the
new office product.
“Approximately 60 percent of
the new construction, 1.9 mil-
lion square feet, is occurring in
the downtown market, which
will increase the office inventory
in this submarket by approxi-
mately 7 percent. With slight-
ly more than half of the new
square footage set to deliver by
the third quarter of 2016, we
are currently expecting a wash
in impact on this first wave of
delivery as current activity is
projecting 1.02 million square
feet of positive absorption dur-
ing that same time frame,” said
CBRE First
Vice Presi-
dent Antho-
ny Albanese.
“Anytime
supply
is
added to the
market, there
is a risk of
overbuilding.
As of right
now, Den-
ver’s office market supply is
being added in a reasonable and
controlled fashion,” he said.
According to CBRE’s second-
quarter MarketView report, the
Denver metro market absorbed
701,662 sf of space in the sec-
ond quarter, recovering from
negative net absorption in the
first quarter to achieve year-
to-date positive net absorption
of 230,779 sf. Direct vacancy is
12.5 percent, near its lowest rate
since the fourth quarter of 2008.
Downtown had the highest
average asking rate for office
space, $33.23 per sf full-service
gross.
Driven by the oil and gas
industry’s troubles, available
sublease space in the central
business district rose to more
than 1 million sf in the second
quarter, surpassing the previous
sublease peak, which occurred
in the first quarter of 2010. Some
of that space is being backfilled
by tenants in financial services,
technology and other industries.
Albanese said new construc-
tion absolutely is needed.
“Companies looking to gain
Anthony Albanese
by Jill Jamieson-Nichols
AmeriCenter, a two-building
office property on East Hampden
Avenue in Denver, sold for $3.4
million to a local investor.
Peter Charczenko bought the
buildings at 9725 and 9745 E.
Hampden from Hampden 9725
LLC. The property comprises
58,054 rentable square feet.
AmeriCenter was approxi-
mately 95 percent occupied by 55
tenantsat the timeof the sale,with
many of the tenants onmonth-to-
month leases. The buyer viewed
the asset as a chance to add value
by seeking longer-term tenants
and bringing rents up to mar-
ket rates, said Giles Conway of
Lincoln Property Co., who han-
dled the transaction with Lincoln
Property’s Mark Dwyer.
“It really sets up well for small
businesses that are looking for
250 to 500 square feet,” said
Conway, noting existing tenants
include financial planners, attor-
neys, accountants, chiropractors
and others. “Each floor has seven
or eight tenants and can be bro-
ken down even more,” he said.
The price per sf was $58.66.
The property sold at a 6.8 percent
cap rate.
“We felt that the property rep-
resented a great value per square
foot, but also allowed for some
real upside in terms of below-
market lease rates and shorter-
term tenancies,” said Lincoln
Property Co. Vice President Mark
AmeriCenter sold to a local investor.
