Colorado Real Estate Journal - June 17, 2015
City Office REIT Inc. has entered into an agreement to buy DTC Crossroads in the Denver Technological Center for $35 million, or $182.86 per square foot. LBA Realty owns the 191,402- sf Class A building, which is 91 percent occupied. The property is expected to generate an initial fullyear cash net operating income yield of approximately 7.6 percent based on the purchase price, according to City Office REIT. “City Office REIT has been focused on building scale across a number of the leading submarkets in Denver. We have assembled a portfolio of great properties located downtown, (in) the Glendale/ Cherry Creek submarket, Greenwood Village and Northwest/ Boulder submarket. Securing a high-quality asset in the DTC, which has a very deep corporate tenant base, was strategic to achieve exposure in each of Denver’s leading submarkets,” James Farrar, CEO, said in a statement. “We believe that developing this market scale will result in operating efficiencies and is a great case study for how we intend to replicate our growth in other target markets,” he said. City Office REIT said the major conditions to closing have been satisfied, and it expects the transaction to be finalized in July. “DTC Crossroads is an outstanding property based on a number of our key considerations,” said Farrar. “It is very well located, in great physical condition, having been institutionally owned and operated, is well leased to strong corporate tenants, possesses future cash flow growth potential, and we can acquire it at a significant discount to replacement cost.” The six-story building at 7595 E. Technology Way was constructed in 1999 as part of the JD Edwards campus and is one of the newest and highest-quality assets in the DTC, Farrar said. It is one of the few properties in the submarket that offers a structured parking garage with underground connectivity to the office building. The parking ratio is just over 4:1,000 sf. DTC Crossroads occupies a strategic corner location fronting both Interstate 25 and I-225. It is within a short walk of the Belleview light-rail station, hotels, restaurants, a new 1,400-unit apartment community and other amenites. Geoff Baukol, Mike Winn and Tim Richey of CBRE are the listing brokers. Vancouver, Ontario, Canadabased City Office REIT is focused on owning high-quality office assets in markets primarly in the Southern and Western United States. With previously announced acquisitions still to close, its portfolio will reach 2.7 million sf.