Downtown Denver Office Towers Command $154M
- Dec 05, 2016
Denver—Franklin Street Properties Corp. has acquired Dominion Towers, two interconnected 19- and 28-story Class A office towers in Denver, for approximately $154 million.
“We are pleased to expand our footprint further in Denver with this off-market acquisition,” Jeffrey Carter, Franklin Street president & CIO, said in a prepared release. “We believe that the acquisition of Dominion Towers will provide additional opportunities for value creation by growing our presence in downtown Denver to almost 2 million rentable square feet.”
Located at 600 17th St., the property consists of approximately 613,527 rentable square feet. It’s situated within one block of light rail access and adjacent to the 16th Street Mall, and provides world-class companies with walkable access to both.
EOG Resources Inc. is currently the largest tenant with approximately 29 percent of the rentable square footage until December 2026.
According to Carter, the company anticipates planned building capital investments of nearly $3 million.
“During 2017, we expect the property to have an average occupancy rate of approximately 89 percent, comprised of multiple tenants with staggered lease expirations,” he said.
Franklin Street funded the acquisition with the proceeds of a $150 million unsecured, two-year bridge loan with JPMorgan Chase Bank, N.A. as administrative agent, with the balance paid from existing cash on hand.
According to CBRE’s latest downtown Denver Office Market Report, in Q3 2016, the downtown submarket recorded negative net absorption of 52,361 square feet, marking the second straight quarter of negative net absorption for the submarket. Overall average direct asking lease rate declined to $33.46 per square foot full-service gross, marking a 2.9 percent decrease year-over-year.
Image courtesy of Yardi Matrix