Two-property DTC portfolio sells for $28M
A national investment management company acquired two Denver Tech Center office properties in a $28.7 million portfolio sale.
TerraCap purchased a two-building, Class A office portfolio totaling 181,000 square feet at 5575 DTC Parkway and 4949 S. Syracuse St. from seller CapRidge Partners. Tim Richey, Charley Will, Jenny Knowlton and Chad Flynn of CBRE represented the seller, while the buyer represented itself.
C.J. Kelly, Brady O’Donnell and Jeff Halsey with CBRE Capital Markets’ Debt & Structured Finance group arranged a $22.8 million acquisition loan for the buyer. According to public records, Colony Credit Real Estate provided the financing.
Terrace at Orchard Station, the office property at DTC Parkway, is a three-story building totaling 115,050 sf on approximately 6 acres. Built in 1982, and renovated in 2008 and 2015, the property includes a state-of-the-art conference center, men’s and women’s locker rooms and showers, a structured parking deck and a web based service request system.
The second office building, at South Syracuse Street, is a six-story building totaling 66,713 sf on approximately 1 acre. It also was built in 1982 and includes a two-story atrium and an attached parking structure.
Will said both properties underwent additional renovations in 2016 that upgraded the lobbies and restrooms and added new speculative suites. According to CoStar data, DTC Parkway was 93% occupied at the time of sale, while South Syracuse Street was 94% occupied.
The portfolio garnered a significant amount of interest from a variety of investors, Will noted. He attributed the strong interest to the property’s urban-suburban location in DTC.
“This sale proves that office investment appetite persists for well-located opportunities in growing markets like suburban Denver. Investors do not make their decisions based on the short term, and the north DTC holds a lot of promise for long-term resiliency and value,” said Will.
Richey agreed, saying, “The DTC Collection’s exceptional urban-suburban infill location in Southeast Denver provides significant advantages with direct access to the Belleview and Orchard light-rail stations, walkability to dozens of restaurants and new multifamily communities, and a short drive from some of Denver’s best executive housing neighborhoods.”
According to CBRE research, DTC was experiencing unprecedented investor demand before the outbreak of COVID-19, with the area north of Belleview seeing historic office investment sales volume in 2019. Seven properties traded that year, all brokered by CBRE, reaching $364 million in total sales volume, up 36% from 2018 and the highest level on record.
TerraCap adds this investment to more than 10 million sf of real estate across the country.
Published in the Dec. 2-15, 2020, issue of CREJ.