Colorado Real Estate Journal - January 21, 2015

CapRidge makes another buy with pair of DTC office assets

CapRidge Partners, which recently acquired its first asset in Denver, has added two more southeast suburban office buildings to its portfolio.

Austin-based CapRidge paid $24.05 million to CBRE Global Investors for The Terrace Building at 5575 DTC Parkway in Greenwood Village and 4949 S. Syracuse St. in Denver, according to public records.

“We think they are very nice properties in great locations, and they also have a lot of upside potential with some additional attention and upgrades,” said Tom Stacy, CapRidge founding partner.

The Terrace Building is a 181,763-square-foot building that was approximately 70 percent occupied, while 4949 S.

Syracuse is a 64,713-sf asset with occupancy of 64 percent.

CapRidge Partners plans to update the lobbies, corridors and restrooms, add LED lighting and other improvements.

The Terrace Building sits at the base of the pedestrian bridge for the Orchard lightrail station, and “4949 S.

Syracuse is very near the intersection of Belleview and I-25, which is sort of a Main and Main location down there,” noted listing broker Geoff Baukol, senior vice president at CBRE.

While there is plenty of investor interest in quality investment properties in the Denver area, the two-building portfolio drew particularly strong activity – and more than 15 offers, according to Baukol.

“You have two assets, both within the Denver Tech Center proper, both phenomenal locations, and both have upside,” said Baukol. “They appeal to what today is our largest buyer pool, which is the value-add buyer pool, so interest was tremendous given those dynamics.

“Well-located Class B assets like these are positioned to have a good run because As are performing so well,” Baukol added. Class B buildings are in demand, vacancies are down and rents are on the rise, particularly “for well-located B product like these.” “There is upside with moving rents to market in a very positively trending market,” Baukol commented.

Both buildings were built in 1982 and renovated six years ago.

The Terrace Building is a three-story building whose major tenants are Belcaro Group, which does business as ShopAtHome.com, occupying more than 30,000 sf, and Comex, a PPG Industries company that leases more than 20,000 sf.

Lambdin & Cheney LLP, a law firm, is the largest tenant at 4949 S. Syracuse, with about 9,000 sf. On Q Financial leases just over 7,500 sf in the sixstory building, along with the U.S. Potato Board, which has 6,800 sf.

CapRidge Partners, which focuses on acquiring assets below replacement cost, recently entered the Denver commercial real estate market with its $23.4 million acquisition of Solarium, a 171,189-sf office property in Greenwood Village.

“We think Denver is a great market for us. It has the attributes we look for,” said Stacy, mentioning quality of life, Denver’s highly educated workforce and strong employment.

“We’re glad to be in Denver.

We’ve had a great reception from the brokers and everyone we do business with. We value the relationships we have with all facets of the industry,” he said, adding the company prides itself on delivering on its commitments and will continue to maintain that reputation as it grows its Denver portfolio.

“We will continue to look in Denver; in fact, we’re looking at other assets now,” he said.

CapRidge Partners’ portfolio comprises more than $400 million worth of office product in Denver; Texas; Charlotte and Raleigh-Durham, North Carolina; Nashville; and Atlanta.