Colorado Real Estate Journal - May 6, 2015
A Canadian real estate company has entered into an agreement to buy the Superior Pointe office complex for $25.8 million, or $173.15 per square foot. City Office REIT Inc. expects to close on the acquisition of Superior Pointe’s two buildings at 1000 and 1100 S. McCaslin Blvd. in Superior in June, the company said in an announcement. The property comprises 149,006 sf of Class A office space that overlooks the town of Superior. Sequoia Properties LLLP has owned the asset, whose largest tenants are Key Bank and SDL, for a decade. Key Bank has been a tenant since the property was built. Superior Pointe is 90 percent occupied and is expected to generate an initial full-year cash net operating income of approximately 7.5 percent based on the purchase price and planned capital improvements, according to Vancouver, British Columbia-based City Office REIT. "Superior Pointe represents a quality acquisition for City Office REIT with strong inplace cash flow from credit tenants. The property is ideally located in Boulder County, near downtown Boulder, which continues to experience unprecedented tenant demand, high occupancy levels and rental rates,” James Farrar, company CEO, said in a statement. “Superior Pointe's elevated location off the U.S. 36 highway offers unobstructed mountain views and easy access to nearby restaurant and retail amenities, including Superior Marketplace and FlatIron Crossing. This submarket continues to attract high-quality tenants, including leading technology and financial services firms, due to its close proximity to Boulder, the University of Colorado, surrounding executive housing and some of the best amenities in Denver,” he said. “Because Superior Pointe is one of the premier quality properties in the area, it is able to offer a strong value proposition to attract and retain tenants," Farrar continued. "We are pleased with Superior Pointe's acquisition metrics and discount to replacement cost. The expected year one cash net operating income yield is 7.5 percent upon the completion of our planned improvements, including a resurfaced parking lot. The buildings were constructed in 2000 and are in very good condition with quality finishes and efficient floor plates for both single and multitenant use." City Office REIT’s first acquisition in the Denver area was the Plaza 25 office complex in Greenwood Village, which it bought last summer for $25.1 million. The company focuses on high-quality office properties in “attractive markets” primarily in the Southern and Western United States. It currently owns or has interest in 2.4 million sf.