Buchanan Street Partners has acquired 5613 DTC with the intent of taking the high profile southeast suburban office tower to the next level.
Buchanan Street bought the 12-story, 224,015-square foot office building, which sits along Interstate 25 at the foot of the Orchard light-rail station pedestrian bridge, from SteelWave LLC. Terms weren’t disclosed, but Arapahoe County records show the price was $32.75 million.
The buyer plans extensive improvements to attract and retain tenants looking for first-class space in Denver’s largest office submarket.
“This is an attractive investment for us because of the building’s strong in-place tenancy, excellent location, attractive view corridors and value-add potential,” said Chris Herthel, Buchanan Street Partners senior vice president. Herthel said, “5613 DTC is an amenity-rich property that is well-positioned to benefit from a comprehensive rebranding and capital improvements plan.”
Buchanan Street plans to invest significant capital into tenant spaces, common areas and building systems. It also is looking to strategically improve the tower’s fitness center, lobby and elevators, café, conference center, parking deck and outdoor patios. It expects its investment to amount to $6 million to $7 million over the next three to four years.
The building at 5613 DTC Blvd. is 80 percent occupied with available suites from 2,000 to 17,000 sf. InteliSecure Inc., Farnsworth Group, EPS Settlement Group, Wells Fargo Advisors and GE Johnson Construction Co. are among its 24 tenants.
Investor interest in 5613 DTC was quite strong, according to CBRE’s Chad Flynn, who handled the transaction with Mike Winn, Tim Richey and Jenny Knowlton.
“It checked the boxes for institutional buyers in that it has structured parking, is on light rail and had a real value add component to it because of the vacancy,” Flynn said. Building features include 9-foot ceilings; efficient, 21,000-sf floor plates; and 4:1,000 parking. The building was built in 1982 and renovated in 2006.
Denver’s approximately 34 million-sf southeast suburban office market houses numerous Fortune 500 companies that are attracted to its proximity to executive and employee housing, retail amenities and accessibility.
“We have seen companies increase their focus on commute times for employees and now making office location decisions based on proximity to housing. The light-rail location was an important factor in our decision to purchase this property because it provides tenant employees an alternative and efficient commute option,” Herthel said.
“The property amenities provide an intrinsic value to tenants that should further appreciate as future developments in the area and access to labor pools become key decision factors for companies,” he added. “We anticipate the repositioning of 5613 DTC will elevate the building’s profile above its current peers and be an attractive option for Class A office users.”
Buchanan Street Partners is a Newport Beach, California based real estate investment management firm that invests in debt and equity capital on behalf of institutional and private investors.
