Downtown Boulder buildings fetch $101.25 million

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1050 Walnut
The building at 1050 Walnut is one of three downtown Boulder buildings that Blackstone Group bought last year for $92.57 million. Blackstone acquired the buildings as part of an approximately $2 billion portfolio and sold them to JP Morgan.

JP Morgan closed a blockbuster deal in downtown Boulder with the $101.25 million acquisition of three office buildings.

The portfolio included 1050 Walnut, Canyon Center at 1881 19th St. and 1900 15th St. The seller was Blackstone Group, which spun off the buildings from an approximately $2 billion portfolio it bought last year.

16 Feb 2011: Headshots of various employees of Jones Lang LaSalle in Denver, CO. ©Trevor Brown, Jr./Trevor Brown Photography

“This is the only portfolio that offered a fee-simple acquisition of this size in downtown Boulder in close to 20 years,” said JLL Executive Vice President Patrick Devereaux. “We had 12 offers and as strong a demand as any offering in recent history in Denver.”

Devereaux, along with JLL’s Jason Schmidt and Baxter Fain, spearheaded the deal in JLL’s Denver office.

The portfolio traded at $467.02 per square foot. The 33,945-sf building at 1900 15th St. used to be occupied by Microsoft and Uber, but has been vacant for several months. According to Devereaux, it was designed for one tenant and provides an opportunity to add value through lease-up. The building was completed in 1994.

The 109,732-sf building at 1050 Walnut, built in 1983, is 95 percent occupied. Tenants include Southwest Research, Foundry Group and LIV Southeby’s International Realty. Canyon Center comprises 73,125 sf of space that is 90 percent leased to TIAA-CREF, Raymond James, Finish Line and other tenants. It was built in 1984.

Overall occupancy was 77 percent at the time of the sale. “The leases in place were on average $6 per square foot below market, so this was an opportunity to buy a core-plus portfolio in downtown Boulder with the ability to sign one lease in the only single-tenant-designed building that is over 30,000 square feet in downtown Boulder and then have a core investment going forward,” Devereaux commented.

The building also has above-average parking for downtown Boulder at 2.42 spaces per 1,000 sf. The average downtown is closer to 1:1,000.

The pool of prospective buyers for the portfolio consists of “well-capitalized” institutional advisers and fund operators, Deveraux said.

For JP Morgan, “This was their first acquisition in Boulder; however, JP Morgan now controls Class A assets in all three of Denver’s premier boutique markets,” he said. The company is involved with Schnitzer West in developing Civica Cherry Creek and worked with Hines and Jordon Perlmutter & Co. to develop 1601 Wewatta in downtown Denver’s Union Station neighborhood.

Featured in CREJ’s June 21-July 4, 2017, issue

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