Colorado Real Estate Journal - December 3, 2014
A Dallas company has acquired the Travelport building in Centennial, soon to become one of the few large blocks of available office space in the southeast suburban submarket. With Travelport relocating to Panorama Corporate Center in March, buyer Encore Office will have 136,954 square feet – with a parking ratio of 5.7:1,000 – to lease at 6901 S. Havana St. in Centennial. “It’s become a very high d e m a n d type of space requirement in the marketplace,” said Riki Hashimoto of Newmark Grubb Knight Frank. “We had significant activity on the building, I think because of the uniqueness of having a large, 130,000-square-foot block that is a true value-add play.” Encore Office, in a joint venture with Middleton Partners, bought the building from Dividend Capital for $9.1 million. It is Encore’s first acquisition in the Denver market. “We like Denver as a market. It’s a dynamic market with good employment growth,” said company President Mark Cypert. “We like the building, the location and the upside potential that it represents,” added Cypert. The two-story building offers large, efficient floor plates, a full cafeteria, “very nice landscaping,” and room to expand both the building and already generous parking, which sets it apart from other available blocks in the southeast suburban submarket. The Class B building sits on 18.8 acres, providing the opportunity to increase parking to as many as 7.5 spaces per 1,000 sf. It is located off the east side of Interstate 25, just south of Arapahoe Road. It has a “campus feel to it,” but is outside the Denver Tech Center and Greenwood Village, so the tax basis is lower, said Hashimoto, who represented the seller with Newmark Grubb Knight Frank broker Dan Grooters.
“There’s a lot of appeal to office-campus type users. We think we have a competitive advantage to backfill the building,” said Cypert. Encore Office retained JLL brokers Peter Merrion and Andy Ross to market the property. Beginning in the first quarter, Encore Office will upgrade the parking lot, and create a new entrance with greater accessibility and curb appeal. Signage and landscaping will be enhanced, the common areas will be modernized, and the interior will be white-boxed for a new user. The building was built in 1989 for United Airlines’ reservations group, which provided the basis for creation of United Kingdom-based Travelport. Encore Office is part of privately held Encore Enterprises Inc., which develops, acquires and manages hotels, multifamily communities, shopping centers, offices and public-private mixed-use developments. In a statement regarding the acquisition, Encore Enterprises Chairman Bharat Sangani said, “6901 S. Havana offers one of the largest contiguous blocks of office space in Denver’s strong southeast suburban submarket. The property currently features abundant parking, large floor plates, multifunctional meeting rooms, a full-service cafeteria and a variety of recreational amenities. The property’s premier location coupled with its fantastic amenities really make it stand out, and we’re certain this will translate into new leases.” Cypert said Encore Office hopes to make additional acquisitions in the Denver area. “Denver is one of our active markets. We think we’ve made a good buy, and we’re excited to be in Denver and look forward to the opportunity to fill this building back up,” Cypert said.