Tamarac Plaza sold for more than $45.3 million, marking the Canadian buyer’s first investment in the Denver market.
The acquisition gives Redstone Group, one of British Columbia’s largest private commercial real estate companies, 335,269 square feet of office space in three buildings along East Hampden Avenue, just off Interstate 25. The seller, Parallel Capital Partners Inc., invested around $30 per sf in capital, and tenant improvements, to Tamarac Plaza since acquiring the property in late 2014.
“We love the asset,” said Redstone Group Vice President Ayaz Velji. “It’s been through a great renovation – it looks great,” he said. In addition, “It has great amenities around it.”
Those amenities – including a Whole Foods and 24 Hour Fitness across the street as well as several restaurants within walking distance – also have drawn tenants to Tamarac Plaza and helped increase the number of investors, particularly those new to Denver, who were interested in owning the buildings, according to JLL Executive Vice President Patrick Devereaux.
“We experienced an influx of new buyers to Denver while marketing that property that were looking for office properties with convenient, walkable access to retail amenities,” he said.
Tamarac Plaza, located at 7535 and 7555 E. Hampden Ave. and 7600 E. Eastman Ave. in Denver, is a five- and six-story office campus with two parking structures and on-site fitness center. It was 87 percent leased at the time of the sale.
The tenant roster includes Western Sugar Cooperative, Farmers Insurance, Argosy University, Securitas, Bell & Pollock, Robinson & Henry, Yield Solutions and numerous others. The property has experienced close to 180,000 sf of leasing activity over the last 18 months due to nearby amenities and proximity to executive housing, said Devereaux, who represented the seller with JLL Executive Vice President Jason Schmidt.
“For many of the tenants that occupy space at Tamarac Plaza, their commute does not involve having to get on Interstate 25,” Devereaux said.
“We think it was a great investment,” Velji commented.
Redstone Group, which also recently acquired office assets in Los Angeles and Lynnwood, Washington, would like to purchase more properties in Denver, he said.
“It’s a thriving market,” said Velji, who added the market weathered the last real estate cycle well. “We like Denver. We think it’s got great potential.”
Parallel Capital bought Tamarac Plaza for $23 million in 2014. Occupancy at the time was about 60 percent.