Bancroft Capital Advisors Inc. is zeroing in on Denver’s west metro submarket, closing on one office building and securing deals to buy three more.
Bancroft’s latest acquisition is Union Terrace, an 84,145-square-foot building off the Union Boulevard corridor in Lakewood. The company paid $11.33 million, or $134.61 per sf, for the building with plans to invest in updates and amenities.
Located at 12596 W. Bayaud Ave., Union Terrace was 86% occupied by 13 tenants representing a range of industries, including engineering, government contract, environmental, health care, technology and professional services.
“We are very attracted to the demographics and the opportunity on the west side,” said Bancroft founder Doug McDonald, whose company bought the Cole Center at Denver West last year and has owned 350 Indiana since 2014.
“You have a barrier to entry due to a lack of available land. You also have a very vibrant workforce on the west side that is growing tired of commute times and wants to be proximate to where they live,” he said. In addition, McDonald said, “Rents on the west side are a significant discount to downtown and provide a better amenity set than the Denver Tech Center.
“We are actively sourcing and looking for additional opportunities on the west side,” he commented. Bancroft has two buildings under contract, and its offer to acquire a third building has been accepted.
While the coronavirus pandemic has thrown the whole economy into turmoil, “The reason that those sellers agreed to our terms and signed purchase and sale agreements is they have comfort that we will be there in good times and bad, and that we are open for business,” McDonald said.
Patrick Devereaux, James Brady and Campbell Davis with CBRE Capital Markets in Denver represented the seller, San Diego-based Presidio Property Trust, in the Union Terrace transaction.
“Union Terrace offered the chance to acquire an infill office building in the supply constrained west Denver submarket. Adding to the asset’s appeal is the property’s proximity to the amenity-rich Union Boulevard retail corridor and surrounding executive housing,” said Devereaux, a senior vice president with CBRE.
Built in 1982, Union Terrace is a four-story building on 3.48 acres. Bancroft Capital Advisors plans to amenitize the asset with an on-site fitness facility, café, common conference rooms and outdoor areas where tenants can work remotely. It also plans upgrades to restrooms, lobbies and common areas.
Union Terrace is close to the Denver Federal Center, the Federal Center light-rail station and St. Anthony Hospital, as well as numerous restaurants, hotels, apartments and other amenities along Union Boulevard.
According to CBRE’s Denver Office MarketView Q4 2019 report, in the fourth quarter the west submarket had no new office construction, a direct vacancy rate of 11.6% and upward pressure on rental rates.
Bancroft Capital Advisors Inc. is based in Manhattan Beach, California, but has focused solely on the Colorado market for the last 20 years. The same day it bought Union Terrace, it sold the three-building Ridgeline Campus in Highlands Ranch for $33.5 million.