Colorado Real Estate Journal -
A real estate investment trust took first prize in the competition to acquire Westmoor Center, a six-building, Class A office park on the Denver-Boulder corridor. KBS Strategic Opportunity REIT Inc. paid an affiliate of CBRE Global Investors $86 million, or $140.32 per square foot, for the 612,890- sf property in Westminster. “Activity was tremendous on this asset. It really demonstrates the imbalance of supply and demand in the marketplace,” said CBRE First Vice President Geoff Baukol. “Northwest Denver is an emerging technology market that also has strong ties to the energy sector. Both of these industries are in a growth mode, which we believe will bode well for the performance of this asset,” said KBS Capital Advisors Executive Vice President Brian Ragsdale. Westmoor Center was approximately 98 percent occupied until a few weeks ago, when Trimble Navigation relocated to a new build-to-suit across the street, dropping vacancy to 82 percent. “Westmoor Center benefits from a great location within the Northwest Corridor and has an excellent base of tenants that have expanded their presence of late. In view of the Westmoor Center IV vacancy, we view this as a value-add opportunity where we’ll be looking to increase occupancy and hopefully enjoy increased rent rates,” Ragsdale said. Westmoor Center offered a rare opportunity for value oriented capital to invest in a single high-quality, well located asset “in a market that is starved for that type of product,” Baukol said. The office complex is part of Ten West at Westmoor Business Park, a 10-building office development that has captured 33 percent of the leasing activity in the northwest submarket over the last two years, even though it represents only 14 percent of the office inventory. “Westmoor Center has really captured a disproportionate share of the leasing activity in the market, and a lot of that is attributable to space that matches market demand, as well as the amenities in the park,” Baukol said. The average tenant size in the submarket is 20,000 sf. Westmoor Center offers 43,000-sf floor plates. Several tenants, including Ball Corp., Lender Processing Services and Reed Group, occupy 50,000 sf or more. Urban Lending Solutions and Datalogix also have a sizeable presence. According to a U.S. Securities and Exchange Commission filing, the weighted-average remaining lease term for the park’s 22 tenants is approximately 3.7 years. Baukol said the office park offered an opportunity to acquire what has been a stabilized park and take advantage of the momentum the property has in the submarket driven by technology, health care and energy companies. The location affords employers the opportunity to draw from highly skilled labor forces in Boulder and Denver, he noted. The two- and three-story LEEDcertified buildings, constructed in 1998-1999, are located at 10055- 10385 Westmoor Drive. Tenants have access to amenities offered throughout Ten West at Westmoor Business Park, including a shuttle, golf course, city recreation center, bike paths, full-time concierge, and on-site deli and full business center. Westmoor Center also offers a parking ratio of 4.57 spaces per 1,000 sf. Baukol represented the seller with Kevin Shannon, vice chairman in CBRE’s El Segundo, Calif., office, and CBRE Executive Vice President Tim Swan in Denver. KBS Strategic Opportunity REIT said in its SEC filing it acquired Westmoor Center with proceeds of its initial public offering, but may later place mortgage debt on the property. Newport Beach, Calif.-based KBS Strategic Opportunity REIT and affiliated companies now own six office properties totaling more than 1.7 million sf in the Denver area, including Granite Tower, Peakview Tower, 210 University, Crescent VIII and Academy Point Atrium I in Colorado Springs. Earlier this year, CBRE handled the $65.49 million sale of three buildings at Ten West at Westmoor to Investcorp. Known as Westmoor Place, the buildings comprise 428,029 sf. Ten West at Westmoor also includes a 204,000-sf building owned and occupied by Scottrade.