What may be the most distinctive office building in the Union Station neighborhood just became the priciest.
The Triangle Building sold for $154 million, or $676.54 per square foot, eclipsing the previous price per sf for an office building in downtown Denver.
Hamburg, Germany-based Union Investment Real Estate GmbH bought the 227,631-square-foot LEED Gold building at 1550 Wewatta St. on behalf of the Unilmmo: Global real estate fund. Seattle-based Metzler Real Estate advised the purchaser.
East West Partners and Starwood Capital Group developed and sold the Triangle Building. CBRE brokers Mike Winn, Tim Richey, Chad Flynn and Jenny Knowlton handled the sale.
The price far exceeds the $602-per sf another German investor paid for the Antero Resources building on the south side of Union Station in 2014.
Completed in 2015, The Triangle Building was 98 percent occupied at the time of the sale. Its largest tenants, WeWork and Liberty Global, occupy around 75,000 sf each, accounting for approximately 70 percent of the tenancy.
There was very good interest in the building, and market conditions made it an opportune time to sell, said Chris Frampton, East West’s managing partner in Denver.
“Through a competitive process, we ultimately selected Union Investment for The Triangle because they are a great owner and manager of buildings,” said Frampton. “Union Investment owns iconic buildings in core locations all over the United States and Europe, and we believe The Triangle Building belongs in a portfolio of that caliber and quality.”
Featuring unique, 24,000-sf floor plates, oversized windows that flood the interior with light and 225 underground parking spaces, The Triangle Building is a 10-story, Class A building directly across from Union Station.
“With regard to location, construction quality and tenant structure, The Triangle is pretty much a perfect fit with our criteria for an office investment in the United States,” said Philip La Pierre, head of Investment Management Overseas at Union Investment. “Denver is now the 16th location where we have a presence in the U.S. market, and Unilmmo: Global and Unilmmo: Europe provide us with two strong vehicles for additional investment in the future.”
Knowlton said investor activity surrounding The Triangle was “probably the strongest we’ve seen on an office listing in recent years.”
“It’s a stunning building,” said Knowlton. “It was new construction. It was state-of-the-art everything, from the exterior finishes to the interior tenant build-out.”
There are many groups looking to preserve capital with core, trophy assets, she said, noting The Triangle was the first stabilized building to come on the market in the Union Station area in more than a year.
“The Lower Downtown submarket has emerged in recent years as a submarket that delivers a compelling combination of work, living and play,” said Matt Scholl, head of Investment Management Americas at Union Investment Real Estate GmbH. “This mix attracts many companies and creates excellent conditions for commercial real estate investment.”
“The Union Station development afforded Starwood Capital the opportunity to invest in the early stages of a citywide renaissance,” commented Dan Schwedler, senior vice president at Starwood Capital Group. “Since acquiring these land parcels during the financial crisis, Denver has flourished, thus enabling our investment thesis to play out as anticipated. At the same time, The Triangle, along with the other assets in this development, including One Union Station and 16 Chestnut, underscores Starwood Capital’s proven ability to deliver top-quality assets that are highly desirable to investors.
“We are thrilled that our ambitious vision for The Triangle has come to fruition through a fantastic partnership with East West Partners and excited to see what the future holds for this asset under Union Investment’s skilled management.”