New Denver Office Building Trades for $213M
- Feb 25, 2011
February 25, 2011
By Barbra Murray, Contributing Editor
The 500,000-square-foot office building at 1800 Larimer St. in Denver comes under new ownership just nine months after developer Westfield Co. Inc. put the finishing touches on the technologically advanced tower. Acting on behalf of an institutional client, Invesco Real Estate snapped up the highly coveted property for an estimated $213 million.
With general contractor Mortenson Construction at the helm, Westfield commenced construction of the 22-story building in Denver’s central business district in 2008, a bold move considering the real estate market had just begun its perilous downward spiral. The fact that Xcel Energy had pre-leased nearly 70 percent of the office space was the motivating factor for moving forward. Not only is 1800 Larimer one of the largest office buildings to have gotten off the ground in 2008, it is one of the largest buildings kicked off that year to actually reach completion. The timing of the project appears to have been just right. The office vacancy rate in Denver’s CBD is 14.6 percent, according to a fourth-quarter report by commercial real estate services firm Cushman & Wakefield, while the vacancy rate at 1800 Larimer is 10 percent.
Commercial real estate services firm Newmark Knight Frank Frederick Ross, which has overseen leasing activity at the property since the very beginning, had a lot to work with when it came to marketing 1800 Larimer for sale, a task the firm spearheaded along with real estate services firm Holliday Fenoglio Fowler. In addition to premier office space in a high-tech environment with state-of-the-art systems, the property, designed by architectural firm RNL, features a 17,000 square-foot outdoor terrace, a conference center and an adjoining fitness facility.
And then there’s the green factor. The building is LEED Platinum-certified by the U.S. Green Building Council, encompassing such sustainable elements as under-floor air systems to maximize outside air, floor-to-ceiling windows to take full advantage of natural light and water-saving fixtures that allow for a 43.6 percent reduction in water use. Lead tenant Xcel is part of the green scheme, too; a minimum of 35 percent of 1800 Larimer’s core and shell energy requirement will be acquired from Xcel’s Windsource power.
Newmark executive managing director David Tilton noted that the building was the first of its kind and attracted a high level of interest. He asserted that the investment opportunity’s appeal was heightened by long lease terms to credit tenants, large efficient floorplates and other energy-saving features.
The appeal was only enhanced by 1800 Larimer’s long list of distinctions. The building is the first office high-rise to materialize in the Denver CBD in a quarter-century; the largest office high-rise west of the Mississippi River to achieve LEED Platinum status; and the first building in Colorado to earn LEED Platinum certification based on USGBC’s LEED Core/Shell version 2.0, which has much more challenging requirements than the earlier version.
Invesco pursued 1800 Larimer aggressively, and knocked out the competition with an offer that set a record. The sale price, according to Tilton, marked the highest amount ever paid for a high-rise in the Denver CBD. “This building has the elements that tenants will come to expect in the future,” Rich McClintock, CEO of Westfield, said. “From a development perspective, it’s been an outstanding success, and should be an exceptional asset for Invesco’s client.”