Denver Property Commands $95M for City Office REIT

The price represents a big premium above the asset’s previous sale seven years ago.
Cherry Creek

City Office REIT has sold Cherry Creek, a 360,000-square-foot office campus in Denver for $95 million. The deal represented a capitalization rate of roughly 5.8 percent, based on in-place cash net operating income.

CommercialEdge data shows the property last traded in 2014 for $59.5 million.    

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Public records indicate that the new owner is an entity related to Boyd Watterson Asset Management. According to CommercialEdge information, the company already owns two properties in the metro, the 156,379-square-foot Atrium III in Greenwood Village, Colo., and the 67,640-square-foot Newport Centre One in Colorado Springs, Colo.  

Located at 700 S. Ash St., the property is within walking distance of public transit and several dining choices, almost 4 miles north of Interstate 25 and less than 5 miles from downtown Denver. Completed in phases between 1962 and 1980, the three buildings underwent cosmetic renovations in 1991, 2002 and 2012. The asset is fully leased to the State of Colorado and houses the offices of Colorado Department of Public Health and Environment.

At the end of last year, City Office REIT signed a 10-year lease renewal at the company’s Lake Vista Pointe in Lewisville, Texas. The tenant was the sole occupier of the 163,336-square-foot office.