Colorado Real Estate Journal - July 15, 2015
Rally Software’s headquarters achieved record pricing for an office building in Boulder, selling for $53.2 million – or a whopping $344 per square foot – according to public records. Houston-based Lionstone Investments bought the 154,624-sf building from MAVDevelopment on behalf of an institutional client. MAVD acquired the property in 2012 and just completed an 89,000-sf expansion for Rally. The building at 3333 Walnut St. is exceptional for Boulder in that it offers essentially new, large-floor-plate office space in an infill location. It’s within a couple of blocks of Boulder Junction, the city’s new transit village, as well as the Twenty Ninth Street shopping and entertainment area and future Google campus. CBRE’s Mike Winn, Tim Richey, Geoff Baukol and Chad Flynn had the listing on the property. They didn’t return phone calls about the transaction. The asset reportedly attracted a crowd of institutional investors because of its location, quality and tenant. Rally Software, which signed a 10-year lease with MAVD a couple of years ago, is being acquired by software giant CA Technologies in a $480 million deal set to close next year. “The investor demand for this infill Boulder asset was phenomenal. Institutional buyers quickly recognized the strong underlying fundamentals, which combined with an incredibly high barrier to entry creates a very appealing investment opportunity,” Baukol said in a press release posted on Lionstone’s website. “This is a sizeable office asset in the context of the Boulder market,” added Winn. “Many institutional buyers had been waiting for the right opportunity to buy in this dynamic market, and this was a solid fit.” “Lionstone is thrilled to be in the Boulder market. This area is highly educated and is home to an innovative and growing tech industry,” said Lionstone CEO Jane Page. “The Rally Software building offers tenants top-of-the-line amenities and the campus environment their talent prefers.” Ann Arbor, Mich.-based MAVDevelopment bought the original 65,545-sf building and land for $15.8 million three years ago. It knew it was likely Boulder-grown Rally Software would expand, but said even if that didn’t occur, the acquisition was a rare chance to build large-floorplate office space that doesn’t exist in central Boulder. Boulder’s office vacancy rate currently is in the single digits. Lionstone Investments is a privately owned real estate investment firm that also owns the Janus Capital World Headquarters in Cherry Creek North.