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(ISSN 1060-4383) Vol. 27 No. 1
Office
by Jill Jamieson-Nichols
DPC Development Co. did
some heavy lifting at the Cher-
ry Tower office building but
left some value on the table
when it sold the building for
$28.93 million.
Albuquerque, New Mexico-
based Goodman Realty Group
will continue updating the
prominent 226,185-square-foot
tower at 950 S. Cherry St. in
Denver, which has upside in
rents and increased occupancy.
“We’re going to be doing
quite a bit of upgrading, mak-
ing it very contemporary and
hip,” said Goodman Realty
founder and CEO Gary Good-
man. Goodman intends to
make the building more invit-
ing with a new entry canopy
and 10-foot porcelain tiles on
the exterior. There also will be
HVAC work, and additional
improvements to the lobbies,
hallways and common areas.
DPC Development bought
Cherry Tower, located in the
Glendale area, for $21.2 million
in 2014 and repositioned the
building by making approxi-
mately $1.4 million worth of
repairs to the parking deck;
turning a well-lit and unused
lower-level law library into
tenant space, and leasing that
up; and redoing the lobby and
common areas. It also added a
conference room, modern café
and “first-class” gym – “all the
amenities that today’s office
buildings require and that ten-
ants are looking for,” said DPC
Development Co. President
Chris King.
“It’s a very good building.
It’s just a great location and
really a strong presentation in
the market. If you’re sitting at
Infinity Park, you look right
at that building, so everybody
knows where it is. It was a
good building to own. We liked
it a lot, and I think it made a
nice statement about our com-
pany.”
Greenwood Village-based
DPC achieved “about 85 per-
cent of our business plan,”
King said. The company typi-
cally holds assets for three to
four years and was nearing
that time frame. “We renewed
a bunch of tenants. The aver-
age rent in the building was
still well below market, and
so we felt like we were selling
this asset to a new buyer with
upside in rents,” said King.
“We had a great response
from both private capital
groups as well as institutional
groups, so we had no short-
age of interest,” said Cushman
& Wakefield Director James
Brady, who listed the build-
ing for sale with Cushman &
Wakefield Managing Direc-
tor R.C. Myles and Associate
Campbell Davis.
Cherry Tower’s largest tenants
include Fidelity National Title and
the law firm of Leventhal & Puga.
Occupancy fromthe time of listing
to sale rose from 78 to 82 percent.
“It as a true value-add office
opportunity in Denver,” said
Brady. “Not a lot of those come
up in our market because the
fundamentals are so good, but
we had in-place rents that were
20 percent below market and
value add through the lease-up
of the vacancies.”
“It was a competitive bid pro-
cess,” King added. “We had a
number of offers, and Goodman
was really well qualified and
presented themselves well. No
doubt they know what they’re
doing. I think they’ll do a really
good job with the building,” he
said.
Goodman said his company
intends to expand its presence in
Denver and is attracted to sub-
markets near downtown.
“Downtowns everywhere are
on fire, but they’re getting very
expensive, heavily congested,
and you’ve got markets right out-
side downtown like the Cherry
Creek and Glendale submarkets
that still have an urban feel, are
very close to downtown, but less
congested and less pricey,” he
said.
The company owns two other
Colorado assets: Pine Creek Vil-
lage Center, a mixed-use prop-
erty in Colorado Springs, and
Hoffman Heights Shopping Cen-
ter in Aurora.▲
DPC Development Co. added value at Cherry Tower and left the new
owner with an opportunity to build on that.