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MAY 1-MAY 14, 2013

by Jill Jamieson-Nichols

Santa Fe, N.M.-based

Rosemont Realty LLC has

acquired Denver’s World

Trade Center, a pair of land-

mark high-rises that anchor

the east end of the 16th

Street Mall.

Rosemont Realty, which

owns approximately 18 mil-

lion square feet of commer-

cial real estate space valued

at more than $1.8 billion,

purchased the 770,221-sf

property from I&G Denver

WTC LLC. The price was

not disclosed, but sources

say the property sold for

$176 million, or $228.51 per

sf.

The World Trade Cen-

ter’s 28- and 29-story tow-

ers are 95 percent leased

to tenants including Noble

Energy Inc., Schlumberger

Ltd., Resolute Energy Corp.,

Baker Hughes, KeyBank

and others.

“Denver’s WTC is an

iconic, skyline property

with a prestigious down-

town address adjacent to the

16th Street Mall,” Rosemont

Realty CEO Daniel Burrell

said in a statement. “This

acquisition follows a broad-

er strategy by Rosemont of

migrating more of its port-

folio into commercial busi-

ness districts where tenant

demand is improving and

rates have the potential to

grow rapidly in the coming

years,” he said.

“If you look at high-rise

office in the Denver mar-

ket, there’s about a 7 percent

vacancy rate above 15, 16

stories,” said Burrell. “That

high-rise segment is and is

becoming more tight, and

that has a natural effect on

rates.”

Sources said a number of

large, co-mingled real estate

funds that look for stabilized

properties with upside went

after the World Trade Cen-

ter, which reportedly has a

fair amount of lease rollover

coming up and rents that are

below market.

Although the spotlight

has been on Lower Down-

town Denver, with its new

construction and the rede-

velopment of Denver Union

World Trade Center changes hands

Denver’s World Trade Center anchors the east end of the 16th

Street Mall.

by John Rebchook

Holliday Fenoglio Fowler,

better known as HFF, recent-

ly arranged $230 million in

financing for the 1,523-unit

Breakers Resort apartment

community near Lowry in

Denver.

It is believed to be the larg-

est refinancing ever for a

multifamily community in

the Denver area.

“It has to be, because The

Breakers is the biggest apart-

ment community in Den-

ver,” said Jeff Hawks, a prin-

cipal of the Denver office of

ARA.

HFF arranged the financ-

ing on behalf of its owners,

the Bascom Group LLC and

its original developer, Buz

Koelbel.

Koelbel and his former co-

developer, Al Feld, sold it

to Bascom in 2006 for about

$190 million in what was the

largest apartment deal ever

in the Denver area.

Feld was bought out of

the deal in the sale to Bas-

com, but Koelbel remains as

owner.

“I think this is our third

or fourth refinancing, but

we have always retained an

interest in it,” Koelbel said.

As part of the refinancing,

General Electric, the original

institutional investor partner

with Bascom, was bought

out, Koelbel said.

“GE is now out,” said Koel-

bel, adding that he retains

a “meaningful interest,” in

The Breakers.

He said GE wanted them

to sell The Breakers.

“We took a run at sell-

ing it last year, but we were

not completely satisfied we

were getting its true intrinsic

value,” Koelbel said.

However, the effort to sell

it helped them arrive at what

a fair price that GE’s stake

in The Breakers would be

worth, he said, based on

what it would have received

in an arm’s-length, third-

party sale.

“All of these big institu-

tional investors have certain

time frames for their holding

period and GE had reached

that time when it wanted to

sell,” Koelbel said.

“These big investors are

not as nimble as we are,”

Koelbel said. “We can walk

in a room and make a deci-

sion, while every decision

big institutional investors

make needs to be discussed

by committees.”

Koelbel said that he and

Bascommade a joint decision

to refinance and take out GE,

rather than sell.“Really, it is

the market that allowed us

to do it,” Koebel said. “Inter-

est and financing terms are

so attractive, it made a lot

of sense. Plus, if we sold it,

we would have to deploy

our capital someplace else.

Where would we put it? It

seemed to make more sense

to refinance.”

The HFF team secured a

$165 million first mortgage,

a $26.25 million mezzanine

loan and $38.75 million of

preferred equity.

The $165 million first

mortgage was a floating-rate

loan and included a three-

year term with two, one-

year extension options. It

was provided through Bank

of America and CIBC.

The mezzanine loan and

preferred equity were pro-

vided by Prudential Real

Estate Investors’ $805 mil-

lion U.S. Real Estate Debt

Fund.

Proceeds were used to

refinance the existing mort-

gage and mezzanine loans

that HFF had secured for the

ownership in 2011; buy out

GE, the existing institutional

equity partner; and provide

capital for future renovations.

HFF arranges $230 million in financing

Buz Koelbel retains a “meaningful interest” in The Breakers, fol-

lowing a $230 million financing deal.

Please see WTC, Page 8 Please see HFF, Page 21

CONTENTS

Greater Denver 4 Boulder County 12 Larimer & Weld Counties 13 Colorado Springs 15 Colorado 16 Finance 19 Law &Accounting 22 Property Management 24 CDE 34 Office 2AA Industrial 3AA Multifamily 4AA Retail 5AA Who’s News 18AA

Inside

A new nest

Empty nesters are expected to

comprise the largest component of renters

at Kent Place Residences

Checking in

A $51 million Westin Hotel is being

eyed for a site in Greenwood Village,

while downtown Denver will see a new

21-story, dual-branded Hyatt hotel

Masterpiece

John Madden Co., whose last

building features an art museum, has

given an artist a tall order to fill for a

new office building in Greenwood Village

Not done yet

A California group buys

the Village at Coronado apartments in

Thornton and seeks additional acquisitions

6 6 1AA 4AA See Section B