Angelo Gordon Grabs Suburban Denver Office Campus
- Sep 27, 2016
Located on South Jamaica Street, the site is fully leased to global engineering and construction firm CH2M, which signed a renewal in late 2015 to extend its lease through September 2032.
“This transaction allowed us to acquire the U.S. and global headquarters of a leading global engineering design company that is well-located in a growing market,” Gordon Whiting, Angelo Gordon founder & portfolio manager of net lease real estate strategy, told Commercial Property Executive. “CH2M constructed the facility themselves in 2002 and has proven its commitment to the corporate campus by entering into a second long-term lease.”
Columbia will use proceeds from the sale to repay borrowings on its unsecured credit facility.
“This disposition was not about timing the market but rather executing on our strategy for the property and our overall portfolio,” Nelson Mills, Columbia Property Trust president & CEO, told CPE. “After securing a long-term renewal with CH2M late last year, we wanted to capitalize on that inherent value by selling and accessing the capital.”
According to Mills, Columbia Property Trust’s team and portfolio are focused on high-barrier, central business district markets, with its holdings primarily concentrated in New York, San Francisco and Washington, D.C.
“This campus on South Jamaica Street has been our only property in the Denver area for several years and was therefore outside the focused scope of our strategy for the portfolio and company overall, so it made sense to sell it now and capitalize on the value created by our renewal with CH2M last year,” he said.
“The Southeast suburban market is home to the largest concentration of corporate headquarters, including six of the state’s nine Fortune 500 companies,” Whiting said. “Within the SES submarket, the Meridian Business Park, where the facility is located, has outperformed, attracting single user corporate campus occupiers. Within a few miles of the facility are over 15 corporate campuses and vacancy in the Meridian Business Park is 7.8 percent relative to 13-14 percent for the overall Denver office market.”
According to the Bureau of Labor Statistics, unemployment in Denver stood at 3.6 percent in June 2016, below the 4.9 percent national average.
“Denver’s economy continues to consistently outperform the nation in terms of job and population growth, home prices, state GDP and personal income levels,” Whiting said. “In 2015, US News and World Report named Denver the best place to live in the nation. The Denver metro area is in the fifth year of strong job growth and ranks in the top 10 metro areas for employment change from pre-recession peak.”