Colorado Real Estate Journal - June 17, 2015
A local investment group picked up a Class B office building in a Class A location in the Denver Tech Center for $6.45 million, or $139 per square foot. Paradigm Capital Ventures’ Paul Congleton said the 46,402-sf building at 5200 DTC Parkway fit his group’s strategy of acquiring coreplus to moderate value-add office and industrial assets. “It’s a quality B building in an A location, and it was stable, which offers the benefit of immediate cash flow but still has, we believe, some upside potential with a moderate rollover risk over the next few years,” he said, adding rents in the building will be able to grow as rates increase in the DTC submarket. “The building offers good upside potential because rents have been rising significantly for Class B office properties in the southeast suburban submarket, and the rents in place are close to $3 per square foot below market on average today,” said Patrick Devereaux of JLL, who represented seller K2 Ventures with JLL’s Jason Schmidt. “The building has a tremendous location at Belleview and I-25 with walkable access to the Promenade shopping center,” he said. “We had tremendous interest in the asset because of the building’s locational attributes. It’s rare to have an opportunity to buy property under $20 million in that location. It’s a great piece of real estate at a Class A location.” The four-story building was built in 1980 and fully renovated over the last two years, Devereaux said. It was 90 percent occupied at the time of the sale. The largest tenants are System Design International, National Storage Affiliates and State Farm Insurance. “We’re actively pursuing other opportunities in the market and are interested in continuing to look for opportunities similar to this one,” Congleton said.
-Centennial Airport Plaza, a two-story multitenant office building in Centennial, recently sold for $4.88 million, or $77.24 per square foot. Denver-based Bradley Investors sold the property at 12150- 12200 E. Briarwood Ave. to Melcor Developments Ltd., a Canadian real estate development and management company with plans to update the property. The building was 88 percent occupied at the time of the sale. “One of the benefits of the asset is it’s a traditional, two-story office building in a market that is predominantly single-story,” said Patrick Devereaux of JLL, who represented the seller with JLL’s Jason Schmidt. The price per sf was “significantly below replacement cost,” he said. Occupied by 26 tenants, primarily local and regional companies, the building was built in 1983. “With the common-area improvements, there’s a lot of upside potential for this buyer,” said Devereaux. “The rents in place were about $3 a square foot below market,” he said. “The buyer does plan to do a renovation to the lobby and common areas and in turn will have the ability to increase rents.” Tom Swan, a Scottsdale, Arizona, broker, represented Melcor in the transaction.