Colorado Real Estate Journal -
A Chicago group that entered the Denver market with an $11.55 million acquisition at Interstate 25 and County Line Road sees promise in the property, the submarket and the metro area. Perennial Investments & Advisors acquired 304 Inverness Way South, a 134,741-square-foot suburban office building in Inverness Business Park in Englewood. The four-story building was 92 percent leased with tenants that include Ultra Resources, an oil and gas company; Colorado Christian University; Black & Veatch Corp., an engineering firm; and others. Perennial Investments, which owns commercial real estate in Indiana, Dallas and Florida, has been looking to get into the market for a couple of years, in part because it thinks the area’s concentration of science and technology – geology, engineering, mining and minerals, biosciences – bode well for future office demand. “Those are all sitting right there either in the building, or they are neighbors throughout the southeast,” said Jeff Echt, Perennial Investments & Advisors principal. “We also see a burgeoning creative class, so to speak, in Denver,” Echt said. “I think there is a chance to wed the hard science that is solid in Denver with this creative class of young folks to make really good things happen in Denver.” Built in 1985 for Honeywell, “304 is really well-located in the southeast market for both decision makers and folks who come to work every day,” said Echt, citing great access to Interstate 25, the 470 beltway and the County Line Road light-rail station. County Line Road runs right toward the front of the building, so, “It’s easy to find the building, which in Inverness is sometimes a challenge,” he noted. “It’s really a well-built building,” Echt added. A four-story parking garage provides 100 percent covered parking, which is unusual in the suburbs and a competitive advantage, Echt believes. Also, the building has flexible floor plates suited for both large and small tenants. The surrounding area is rife with restaurants and retail, including Park Meadows mall. “Those are very important to office users,” said Perennial Investments principal Gus Miller, adding 304 Inverness is close enough for easy access to those amenities, but far enough that employees don’t have to be caught up in traffic. “We’re excited. We think that the market feels like it’s getting a little bit better for landlords. We think the economy is generally picking up,” said Echt, adding factors that impact returns on office investments appear to be trending in the right direction. Perennial Investments & Advisors bought 304 Inverness Way South from an entity affiliated with Equity West Investment Partners and Inverness Properties. The sellers’ investment in the property included Class A common-area finishes, upgraded tenant build-out and building infrastructure. “It fit our model of fundamentally sound real estate – well-located, well-constructed and, now, well-leased,” said Equity West principal Dave Naus. “We had an investment horizon with the capital. It was time to liquidate. We had cooperation from the lender, and it made it a profitable outcome for everybody involved.” As a smaller, suburban investment property, the asset drew interest from private capital, said Mike Winn of Cushman & Wakefield of Colorado, who represented the sellers with Cushman & Wakefield brokers Tim Richey and Chad Flynn. The location is appealing because it is right off of I-25, within walking distance to Inverness Golf Course, an athletic club and hotels, said Winn, who added that investors derive comfort from covenant controls within Inverness Business Park. “Inverness as a business park is very high image. There’s pride of ownership,” he said. Inverness Properties will continue to provide property management for the building, while Nathan Johnson and Pete Staab of Newmark Knight Frank Frederick Ross will handle leasing.