Colorado Real Estate Journal -
Santa Fe, N.M.-based Rosemont Realty LLC has acquired Denver’s World Trade Center, a pair of landmark high-rises that anchor the east end of the 16th Street Mall. Rosemont Realty, which owns approximately 18 million square feet of commercial real estate space valued at more than $1.8 billion, purchased the 770,221-sf property from I&G Denver WTC LLC. The price was not disclosed, but sources say the property sold for $176 million, or $228.51 per sf. The World Trade Center’s 28- and 29-story towers are 95 percent leased to tenants including Noble Energy Inc., Schlumberger Ltd., Resolute Energy Corp., Baker Hughes, KeyBank and others. “Denver’s WTC is an iconic, skyline property with a prestigious downtown address adjacent to the 16th Street Mall,” Rosemont Realty CEO Daniel Burrell said in a statement. “This acquisition follows a broader strategy by Rosemont of migrating more of its portfolio into commercial business districts where tenant demand is improving and rates have the potential to grow rapidly in the coming years,” he said. “If you look at high-rise office in the Denver market, there’s about a 7 percent vacancy rate above 15, 16 stories,” said Burrell. “That high-rise segment is and is becoming more tight, and that has a natural effect on rates.” Sources said a number of large, co-mingled real estate funds that look for stabilized properties with upside went after the World Trade Center, which reportedly has a fair amount of lease rollover coming up and rents that are below market. Although the spotlight has been on Lower Downtown Denver, with its new construction and the redevelopment of Denver Union Station, around 70 percent of the office product downtown is within a few blocks of the World Trade Center. Burrell said the asset is a natural fit for Rosemont because, while its portfolio is heavily weighted in the energy sector, it wants to be in markets with diversified economies, like Houston and Denver. “While we may be tied to that industry, the market is not,” he said. Rosemont Realty bought the 165,154-sf Cole Center in Golden last year and also owns two other commercial properties in Denver, Central Place and Diamond Hill. “The investments that we’ve had there have historically performed very well,” said Burrell, adding the company is continuing its investment in Denver. “We hope fairly soon to launch a development project in one of the suburban markets inside the Denver MSA,” he said. Burrell sees a good story in consistent positive absorption in Denver’s office market and growing demand among tenants. “Denver is making the kind of infrastructure investments in its downtown that are attracting large users,” he added. Located at 1625 and 1675 Broadway, the World Trade Center is a LEED Gold-certified asset. Tower I, completed in 1979, consists of 375,858 sf. Tower II, built in 1980, is a 394,363-sf building. The buildings have undergone more than $10 million in renovations and upgrades over the last decade. Tim Richey and Mike Winn of Cushman & Wakefield of Colorado Inc. brokered the sale. Rosemont Realty will provide property management services, and Andy Ross of Jones Lang LaSalle will handle leasing. “With the addition of Denver WTC and Cole Center in the past year, Rosemont now owns and manages approximately 1.4 million square feet in the Denver MSA,” said Michael Mahony, Rosemont Realty chief operating officer. “This acquisition will allow us to continue building our Denver asset management team, enhance our leasing capabilities and future enable our tenant services package.” Rosemont Realty has acquired three other office complexes totaling more than 1.3 million sf this year. They include the Concourse office complex in Jacksonville, Fla., Dulles View office complex in Herndon, Va., and 2000 Market Street in Philadelphia. The company owns more than 173 office buildings in 25 states. It has regional offices in Albuquerque, N.M., as well as Atlanta, Dallas, Denver, Houston, New York and San Antonio.