TerraCap Management LLC made its second acquisition in the Denver market with the $77.52 million purchase of Centerpoint I & II at Interstate 25 and Colorado Boulevard.
The Florida-based real estate investment management firm bought the Class A office towers from Investcorp and Schnitzer West, which renovated the buildings after acquiring them three years ago.
“Centerpoint has many of the characteristics we look for in acquisitions and is very similar to an earlier acquisition: Denver Corporate Center II & III – a history of occupancy and rate increases, opportunity to add value, a vibrant environment of new development and walkability to light-rail and amenities,” said Albert Livingston, TerraCap partner and national director of asset management.
“Centerpoint is our second acquisition in the Denver market, moving us toward the goal of creating critical mass in a market which has many of the characteristics we see in our target markets,” added Steve Hagenbuckle, TerraCap founder and managing partner.
Located midway between downtown Denver and the Denver Tech Center, Centerpoint I & II are 14- and 16-story buildings that occupy 3.6 acres at 3900 E. Mexico Ave. and 1777 S. Harrison St., respectively. Centerpoint I is a 168,486-square-foot building, and Centerpoint II totals 205,534 sf.
“We received great interest from a very broad base of investors. Most were drawn to the opportunity because of the prominent visibility along I-25 and the central location. The buildings are close to equidistance between the CBD, Cherry Creek and the DTC,” said Jenny Knowlton of CBRE Inc., who listed the property with CBRE’s Tim Richey, Mike Winn, Charley Will and Chad Flynn.
Centerpoint I & II were 89% leased at the time of sale. Tuff Shed and Smashburger both have their corporate headquarters there.
Investcorp and Schnitzer West bought Centerpoint I & II in 2016 for $61.7 million. They invested in several improvements to the property, including lobby renovations to both buildings, creation of a “great room” offering tenants flexible common space, as well as elevator modernization and landscaping upgrades.
“In partnership with Investcorp, we revitalized the amenities and created modern, functional and flexible office space that aligns with the needs of employers and the talented workforce they want to attract and retain,” said Doug Zabel, Schnitzer West managing partner. “The Denver market is thriving. The acquisition of Centerpoint I & II demonstrates the strong economic trends present in the region and reinforces Schnitzer West’s commitment to the area. We are excited to be moving forward with The Current River North and other projects in the area.”
“We’re bullish on the inmigration and economic growth aspects for Denver, both in the short and long term,” added Steve Good,” a partner with TerraCap. “We feel this asset is in a great location and will benefit from that growth for years to come. Investcorp and Schnitzer West did a great job improving the property, and we enjoyed working with them on the transaction.”
Bank of America provided debt financing for the acquisition.
