Colorado Real Estate Journal - February 4, 2015
A Denver group already is adding value to an 111,786-square-foot office building midway between downtown and the Denver Tech Center. Central Development, in partnership with DMI Real Estate, just paid $9.88 million for the office building at 1660 S. Albion St. “The building was 70 percent occupied, but we have over 10,000 square feet of deals that will bring it to 80 percent,” said Jeremy Records, Central Development principal. “We feel the rents are below market, generally across the board, and we think we can push those up. We’re going to have to spend a fair amount of money on it, but in the next year, I think it will be where we think it should be,” added DMI’s Dan Murphy. Rents have increased $2 to $4 per sf since the buyers put the 11-story building under contract in April but continue to be lower than rents in downtown and Cherry Creek. “We see what’s happening to rents downtown, and we feel that is going to be displacing some people who can’t pay the rents that downtown is commanding,” said Records, adding the location also is prime for capitalizing on tenants being displaced by the building boom in Cherry Creek. “It really provides ease of access to the entire Denver office market,” he said. Some long-term tenants want to remain in the building but are cognizant of Denver’s increasing rental rates, according to Murphy. “A lot of tenants want to stay and just adjust to the market,” he said. “The corridor is really coming alive, like all of the market is,” said Kurt Holzkamp of Unique Properties LLC-TCN Worldwide, who represented seller Sperry Equities. Holzkamp said the property’s location midway between the tech center and downtown, a block off of Interstate 25, is ideal for many tenants. Many occupants are small professional services companies that have customers coming and going, so it is very convenient from that standpoint, said Records, adding the diversity of the tenant base is part of the building’s appeal. Of approximately 50 tenants, law firm Benson & Case is the largest. It is expanding from approximately 4,000 sf into the entire top floor, about 8,000 sf. Located across I-25 from the Colorado light-rail station, the building was constructed in 1973. Sperry Equities put several million dollars into improving the lobby, common areas, roof, and mechanical and electrical systems. “We will continue to make upgrades to the building, both mechanically and aesthetically,” said Records. The building no doubt will receive plenty of attention from the new ownership because Central Development will office there, along with Central Management, which will manage the property.