Colorado Real Estate Journal - July 15, 2015
Stoltz Real Estate Partners continued its buying spree in Denver with 155 S. Madison, a 43,161-square-foot office building in Cherry Creek. Stoltz paid $11.45 million, or $265 per square foot, one of the highest prices per sf for pure office space in Cherry Creek, a c c o r d i n g to Patrick Devereaux of JLL. The building was 93 percent leased. The largest of its 23 tenants is Wynkoop Brewing Co., which has its administrative offices in 5,000 sf. The smallest tenant is 500 sf. “One of the big keys to this asset is it has a 3:1,000 parking ratio, which is very rare in Cherry Creek. One of the big challenges of tenants trying to occupy space in Cherry Creek is availability of parking,” said Devereaux, who said office buildings in Cherry Creek’s core typically have a single parking space per 1,000 sf. “That makes this asset very appealing to the small tenant base,” he said. Also, “It’s a great low-priced alternative asset to some of the other assets that are in Cherry Creek,” Devereaux said. Newly constructed office space in the submarket averages around $35 per sf triple net, and rates at 155 S. Madison are $26 to $28 per sf gross, he said. Built in 1974, 155 S. Madison was in need “significant capital improvements” when the seller, an affiliate of Ogilvie Properties, bought it in 2012, according to Devereaux. “Ogilvie did an unbelievable job of repositioning and rebranding this asset to attract a very stable, longterm, small-tenant office base,” he said. “The building fits very well within its competitive set.” In-place rents are approximately $5 per sf below market, said Devereaux, who represented the seller with JLL’s Jason Schmidt. There was “tremendous interest” in 155 S. Madison, Devereaux said. “We had 12 offers to purchase the asset, and the interest ranged from private individuals to foreign capital to a pension fund adviser. After Lower Downtown, Cherry Creek is the most preferred infill location for investment capital in Colorado.” Adjacent to Pulaski Park, which houses the Gates Tennis Center, the two-story building has unobstructed mountain views over Cherry Creek Shopping Center. Stockton Baker of DTZ providing leasing expertise in the transaction. Stoltz Real Estate Partners, based in Pennsylvania, has acquired a dozen buildings, predominantly office buildings, in the Denver area in a little more than a year. It recently closed on 1730 Blake St. in Lower Downtown.