Office Properties

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Page 4 — Office Properties Quarterly — July 2015
Minimum Bid $50 psf -----
Previous units were sold between $165-$210 psf
LOCATION
Located within 4 miles of the new St Anthony’s
Medical Campus and few blocks from US-285
with easy access to C-470 and great visibility
from Kipling Street with near traffic count of
100,000 VPD. 1-877-612-8494
3 UNITS AVAILABLE
Unit 108 - 1,600 sq ft
Unit 207- 3,222 sq ft
Unit B (208-209) - 4,450 sq ft
HIGHLIGHTS
Great access and visibility from Kipling
Adjacent to new and busy retail center
Near Federal Center, 285/Hampden, C-470
Busy intersection with strong traffic counts
Newer construction with modern architecture
Private entrances with dramatic window lines This is your chance to capture a fantastic deal for your next business
location or to lease out and increase your portfolio.
All three units will be sold on this date to the HIGHEST BIDDER.
Property will
ABSOLUTELY
SELL
once minimum bid is met.
AUCTION
July 31, 2015 1pm
2535 S Lewis Parkway, Lakewood, CO 80227
OFFICE CONDO
PREVIEW
DATES:
Saturday, July 17th
Saturday, July 24th
11:00am - 2:00pm
3%
Broker
CO-OP
Investment Trends
D enver’s office investment
sales market saw robust
activity during the first five
months of 2015 with capital
coming from national insti-
tutional buyers and private capital
investors in Denver and elsewhere
around the country. This activ-
ity continues from 2014, creating
an imbalance of supply-demand
and resulting in multiple, compet-
ing offers in this arena. For many
institutional investors, acquisition
parameters put Denver in the fore-
front of searches due to the region’s
thriving economy and attractive cli-
mate. Local owners, users and inves-
tors are betting on Denver as well,
making it an incredibly tight market.
A number of significant office
sales took place during the first and
second quarter. This includes a new
record sale of the Village Center Sta-
tion in Greenwood Village that sold
to KBS REIT for $326.50 per square
foot, the highest price per sf in the
southeast market. The property is
a mixed-use office and retail space
with an attached parking structure.
The price may seem high to some
onlookers but, with rising construc-
tion prices and downtown’s highest
sale price north of $600 per sf for
the office buildings flanking Union
Station, this may be considered a
deal.
Cap rates for office investments
averaged around 7.1 percent in 2014
and, so far in 2015, remain at 7.1
percent, according to Real Capital
Analytics. Value-add buyers are
prevalent in the marketplace; how-
ever, the demand
for assets with
higher vacancy
rates and proper-
ties in need of
significant renova-
tions has peaked.
Some properties
are being marketed
with pro forma
higher cap rates,
trying to capitalize
on the low office
investment inven-
tory and promising
potential buyers that leasing will
improve.
A recent transaction in the south-
east suburban market was the sale
of Park Meadows Corporate Campus,
a vacant building just south of Park
Meadows Mall. The property was
vacant since its 2009 construction.
A local private investor recently
purchased the property for $118 per
sf, recognizing the low cost of the
property compared with its replace-
ment cost. The new owner will lease
the property to medical and general
office tenants.
Downtown, 1515 Wynkoop recent-
ly traded for $560 per sf. This office
and retail building, which houses
restaurant Fogo de Chao and office
tenants include Chipotle, Policy
Studies Inc., and Green, Manning
and Bunch, is approximately 370,000
sf and was 97.5 percent leased at the
time of sale. The building received
multiple offers, and exemplifies true
institutional demand for core assets,
not only in Denver, but also in the
Western United States, said Geoff
Baukol of CBRE, who represented
the seller.
It is well known that Denver
is growing, with the population
increasing 1.74 percent in 2014. This
growth is attracting many compa-
nies that want to hire the talented
workers who move to Denver for the
lifestyle. Many companies prefer to
own rather than lease, yet it is a dif-
ficult task to buy when there is this
much competition. There are still
owner-user deals in the market, and
though some properties are highly
competitive, others are available and
remain good investments.
The office investment sales trends
should continue through 2015 if
interest rates remain favorable.
Concerns affecting investment sales
include multiple construction proj-
ects coming on to the market and
excess space returning to the mar-
ket for sublease from the oil and gas
industry.s
Monica Wiley,
LEED AP
Associate,
CBRE, Denver
CBRE Research, Q1 2015
The graph illustrates sales volume in the past five years along with average price per
square foot on the right column and indicated by the orange line. The pace is steady for
continued sales volume similar to the past two years but average price per sf is increas-
ing due to demand.