Colorado Real Estate Journal - February 5, 2014
Beacon Investment Properties has entered the Denver market with the $25.05 million acquisition of 6455 South Yosemite, a 10-story office building in the Denver Tech Center. The 198,000-square-foot LEED Gold building is adjacent to Interstate 25 and the pedestrian bridge for the Arapahoe at Village Center light-rail station. “We’ve been patiently studying Denver for almost a year to find just the right office property as our entry into the marketplace, and 6455 South Yosemite met all our criteria,” Ariel Bentata, co-founder and managing member of the Hallandale, Fla.-based company, said in a statement. “It’s a stable, cash flowing architectural landmark in Denver’s strongest suburban submarket with generous indoor and outdoor parking, exceptional access for motorists and public transit commuters and a solid tenant base that we were able to acquire at a significant discount to replacement cost.” Beacon Investment Properties is a real estate institutional investment fund management company that has acquired 3.6 million sf of top-tier commercial properties in the last 12 months. “We believe the Denver market will continue to gain strength throughout its nine-county region, and we’re currently looking at other stable, performing and value-creation suburban and downtown Denver office properties,” Bentata said. Major tenants at 6455 Yosemite represent the top three industries – according to the Metro Denver Economic Development Corp. – for employment growth in the Denver metro area in 2013: energy, information technology/software, and health care and wellness. They include Ventyx, a software company, Wealth Strategies Group and United Healthcare. “We like the suburban submarkets because we believe the supply and demand fundamentals are favorable for investment. We like the bases we can get on suburban properties,” said Brian Rosen, Beacon Investment Properties’ director of acquisitions. Also, “We think there is some upside in rental rates over the near term, and the economy in Denver is pretty diversified, so that helps drive leasing activity,” he said, adding most of the product Beacon has looked at in Denver is newer vintage, which also is appealing. According to Chad Flynn of Cushman & Wakefield of Colorado, the property was fully marketed unpriced and received a dozen serious offers. “We selected Beacon because they were competitive on price, have a good reputation and they are active buyers throughout the country,” he said. “A lot of investor groups are being priced out of the coastal markets, making Denver more and more attractive with its strong infrastructure and growing economy,” said Flynn, who represented the seller with Cushman & Wakefield of Colorado brokers Tim Richey and Mike Winn. Susan Hill, senior managing director for HFF in Houston, secured a $28 million loan from a major international bank for the acquisition. Bentata described 6455 Yosemite as an “ideal fit for our portfolio of office properties that are distinctive by their tenant-friendly design, location and amenities in their marketplaces.” Beacon was attracted to the asset because of its large and flexible 21,600-sf floor plates, 836 parking spaces with an overall parking ratio of 4.35:1,000, including 3:1,000 of covered parking, and the “outstanding location in the Denver Technological Center facing Interstate 25 and its proximity to the light-rail station,” he said. Penny stock king Meyer Blinder, who served time for securities fraud, built the building for his company’s headquarters in 1982. It was known locally as the Blinder Building. Public records show the seller was a limited liability company associated with Prudential Real Estate Investors. Rosen credited the seller with doing a superior job of maintaining and continually upgrading the property, including spending $2 million on improvements over the past five years. The building is LEED Gold certified for innovation in sustainable energy and environmental design. The office building was 93 percent occupied at the time of the sale. Beacon Investment Properties focuses on acquiring Class A and B-plus commercial office properties in Class A locations in premier submarkets across the largest and fastest-growing metropolitan markets in the Southwest, Southeast, Midwest and, now, West. It has offices in Minneapolis, Houston, Dallas and Atlanta.