Colorado Real Estate Journal - January 1, 2014
A nearly 1.2 million-square foot office portfolio sold to Patriot Equities LP in one of Colorado Springs’ largest-ever office transactions. The suburban Philadelphia based real estate development and investment company purchased the 15-building portfolio from Corporate Office Properties Trust in a transaction valued at $134 million, according to COPT. “It was by far the best collection of buildings in Colorado Springs in terms of quality of construction and age,” Cushman & Wakefield of Colorado’s Mike Winn said of the properties, which garnered significant interest and a number of offers. “A buyer like this and a sale like this really shows the strength of the Colorado Springs market,” added Peter Scoville of Cushman & Wakefield|Colorado Springs Commercial. “It gives validity to the fact the market here has turned and assets in Colorado Springs can draw strong capital.” Winn and Scoville were part of the team, which included Tim Richey of Cushman & Wakefield and Greg Phaneuf of Cushman & Wakefield|Colorado Springs Commercial, that handled the transaction, one of the highest priced office sales to close in the marketplace. The 1.17-million-sf portfolio comprises properties in the North Interstate 25 and Airport submarkets of Colorado Springs. The properties include: 565 Space Center Drive, 86,837 sf; 655 Space Center Drive, 103,968 sf; 985 Space Center Drive, 104,031 sf; 745 Space Center Drive, 51,770 sf; 980 Technology Court, 33,207 sf; 1055 N. Newport Road, 62,245 sf; 1670 N. Newport Road, 67,260 sf; 3535 Northrop Grumman Point, 130,573 sf; 10807 New Allegiance Drive, 145,498 sf; 12515 Academy Ridge View, 61,372 sf; 9925 Federal Drive, 53,744 sf; 9945 Federal Drive, 74,005 sf; 9950 Federal Drive, 66,221 sf; 9960 Federal Drive, 46,947 sf; and 9965 Federal Drive, 77,583 sf. The properties feature both single-tenant and multitenant space as well as single-story and multistory buildings home to tenants including Northrup Grumman, Lockheed Martin, Spectranetics and RT Logic. Eleven of the buildings were constructed since 2001; a number of those were built since 2008, and many are LEED Silver and Gold certified. When Patriot Equities started looking at the portfolio, occupancy was around 87 percent and with a new lease expansion to be signed, occupancy will be above 91 percent, noted Geof Gardner, chief investment officer of Patriot Equities. “One of the attractive features about the portfolio is the momentum in the leasing market,” said Gardner. “COPT did an amazing job building a portfolio of high-quality buildings at the most strategic locations in the marketplace and we are excited about building on their momentum,” added Erik Kolar, Patriot Equities’ president and CEO. “We are pleased to have completed our Strategic Reallocation Plan within the three-year time frame we established for ourselves and to have executed these dispositions at exit cap rates that were within our guidance,” Roger A. Waesche Jr., COPT’s president and CEO, said in a release regarding the sale. With the sale, COPT now owns only land in the Colorado Springs market, which it first entered in 2005. CBRE will manage the portfolio, which represents Patriot Equities’ first foray into the Colorado market. Patriot Equities owns, operates, and invests in the entire spectrum of corporate real estate property types, including office, industrial, raw land and mixed-use space in a geographically diverse footprint that spans the entire North American continent. Patriot and its principals have acquired more than 20 million sf of corporate real estate in excess of 80 buildings, across 14 cities, with development value in excess of $1 billion.