Cherry Creek Plaza will undergo a multimillion-dollar renovation and repositioning following a recent joint venture between Chicago-based Origin Investments and Corum Real Estate, a longtime Denver commercial real estate firm.
The two companies completed a recapitalization and acquisition of the two-building, 314,000-square-foot property at 600 and 650 Cherry St. in Glendale. Mike Winn, Tim Richey and Chad Flynn of CBRE assisted with the deal.
The renovation, focusing primarily on lobbies, common areas, restrooms and other amenities, will bring the 13-story buildings’ finishes and amenities in line with the market.
“The opportunity to acquire this asset in an off-market environment with a well-regarded local operating partner in Corum, as well as the compelling value-add story, was extremely attractive to us,” David Welk, Origin Investments managing director of acquisitions, said in an announcement.
“Most properties in Cherry Creek’s competitive set already have completed extensive upgrades, strengthened occupancies and increased their value by as much as 30 to 40 percent. In partnership with Corum, we have developed an extensive renovation plan for the asset and are excited about the opportunity to capitalize on the improving market fundamentals.”
Welk said the decision to invest in Cherry Creek Plaza was strengthened by Corum’s long-standing presence in the market, and its decade-long ownership and management of the property.
“For more than a decade, we’ve known that Cherry Creek Plaza is a great investment opportunity,” said Mike Komppa of Corum Real Estate. “We’re excited to partner with Origin in operating and managing these buildings to the next level, enhancing the value of the property while delivering value and service to our clients.”
Lobby renovations will include new tile and wall coverings, and expansion of ceiling heights. Common area corridors and elevators will be upgraded with similar design elements. In addition, common conference rooms in each of the buildings will receive new finishes, furniture and state-of-the-art audiovisual systems.
While each building has a fitness center with a racquetball court, lockers and showers, the ownership said one fitness facility is more than adequate for the size of the property. It plans to upgrade one of the centers and is considering a creative use for the other center and the racquetball areas.
In addition, the parking garage and elevators will undergo an extensive renovation to address deferred maintenance and extend their useful lives.
Cherry Creek Plaza is 82 percent leased to a well-diversified rent roll group of tenants, the largest of which are GCC of America, Rose Community Foundation and Walgreens. Occupancy in the Glendale/Colorado Boulevard submarket is nearly 90 percent.
The buildings are immediately east of Infinity Park and the Cherry Creek Trail, which provide miles of uninterrupted walking, running and biking and also serve as a barrier to future development, protecting the buildings’ mountain views. Millions of sf of retail space and restaurants are within walking distance.
Cherry Creek Plaza is Origin’s second investment in Denver within approximately six months. The company acquired Denver Corporate Center I, a 198,000-sf Class A office building, for $23 million earlier this year and has since added a fitness center, wifi cafe, locker and shower facilities, bike storage and other improvements.
Origin Investments acquires office and multifamily properties in eight fast-growing markets and has assets valued at more than a half-billion dollars under management. It currently is raising capital for its Fund III, a $150 million fund for which $70 million in capital has been committed, including $10 million from the firm’s co-founders, David Scherer and Michael Episcope. Its previous two funds are averaging a 25.4 percent net return to investors, the company reported.
