One of the largest owners of office properties in the U.S. bought three buildings in Boulder as part of an approximately $1.9 billion U.S. portfolio.
Canyon Center, 1050 Walnut and 1900 15th St. were part of a portfolio of 26 properties around the country that Blackstone Group bought from Alecta, a Swedish pension fund manager. The Boulder assets sold for a combined $92.57 million, representing what is believed to be the largest fee simple, 100 percent ownership transaction of office properties in downtown Boulder since the 1990s, according to JLL’s Patrick Devereaux.
JLL’s Capital Markets group in New York led the transaction, with Devereaux, Jason Schmidt and Joe Heath of the Denver office representing the seller locally.
The deal included rights to parking spaces in city parking structures, giving the assets approximately 2.4 spaces per 1,000 square feet, considerably higher than the average 0.5 to 1:1,000 ratio in downtown Boulder, Devereaux said.
The approximately 112,000-sf building at 1050 Walnut, which sold for $46.4 million, was 94 percent occupied at the time of the sale. Techstars, Foundry Group and Southwest Research Institute are among the tenants.
Canyon Center, located at 1881 Ninth St., sold for $32.9 million. The approximately 75,000-sf building was 95 percent occupied with tenants including TIAA-CREF and Finish Line.
The 33,000-sf building at 1900 15th St. was vacant at the time of the sale. A division of Bing used to occupy it but relocated to Louisville after being acquired by Uber. That building sold for $13.27 million.
“There’s great opportunity to add value because the leases in place are approximately $6 per square foot below market,” said Devereaux, adding there also is value-add potential in leasing up 1900 15th St. “It’s one of the only large blocks of space in Boulder and the only building that was designed as a single-tenant asset,” he said.
The deal reflects ongoing investor appetite for Boulder properties and increasing interest from institutional investors, according to Becky Callan Gamble of Dean Callan & Co., a longtime Boulder real estate professional who leased the assets for Alecta.
“We’re seeing more and more institutions come in and purchase assets, be they multifamily or commercial or hospitality. I think that speaks to the strength of the market, and the attractiveness and the safety of the market,” she said.
Although older assets, all three buildings are considered Class A for the Boulder market. “They’re also pretty complimentary of one another in terms of tenant sizes. Within that portfolio, they can really accommodate small users as well as large users,” said Gamble.
In addition to the U.S. portfolio, JLL’s Capital Markets group was retained to sell a portfolio of assets in the United Kingdom on Alecta’s behalf.
