Colorado Real Estate Journal -

Griffin buys Comcast building; adjacent building also trades

Griffin Capital Corp. has acquired one of two neighboring Class A office buildings that recently sold in Greenwood Village.

Griffin, on behalf of Griffin Capital Net Lease REIT Inc., paid $27 million for Quebec Court II, a 157,000-square foot building that is 100 percent leased to Comcast Cable Holdings LLC. The tenant, a subsidiary of Comcast Corp., has approximately nine years remaining on its lease.

Located at 5800 S. Quebec St., the building was developed in 1980 and renovated in 1998. It has upgraded features, including redundant backup power systems and HVAC equipment.

As part of the transaction, Griffin negotiated and executed a reciprocal parking easement that allows use of approximately half of the stalls in a five-story, 598-space parking garage on the adjacent Quebec I property.

“Given the investment-grade credit quality of the tenant and substantial remaining lease duration, we are pleased to have acquired this asset at a favorable going-in capitalization rate of 8.06 percent,” Louis Sohn, Griffin Capital senior vice president of acquisitions, said in a statement. “Further, with 3.3 percent average annual net rental rate increases, the property is positioned to both continue to deliver superior returns and provide attractive NOI growth for the entire remaining duration of the lease.” Cushman & Wakefield of Colorado brokers Mike Winn, Tim Richey and Chad Flynn were the brokers on the transaction.

“We are pleased to complete our second acquisition in the Denver market with the Winn-Richey team of Cushman & Wakefield in the past six months and meet our objectives of acquiring solid real estate, located in a liquid market with a long-term lease to a high-quality tenant. With this acquisition, the Griffin Capital Net Lease REIT now has a total capitalization approaching $400 million and approximately 72 percent of its net operating income derived from or guaranteed by investment-grade-rated entities,” said Michael Escalante, Griffin chief investment officer.

“This acquisition provides a great start to 2013 as we look toward building on the acquisition momentum we experienced in 2012.” Griffin Capital acquired The Travelers Indemnity Co.’s regional headquarters building in Greenwood Village for $16.1 million last year. It also owns the Quad/Graphics building in Loveland. “We love Colorado,” Escalante said.

JE Robert Fund III sold Quebec Court II.

Quebec Court I, located at 5700 S. Quebec, also recently sold in a deal handled by Winn, Richey and Flynn.

ACM Quebec Owner IV-B LLC purchased the single tenant building and parking garage from JER CCP Quebec Court I LLC for $7.15 million.

Tw telecom occupies the approximately 130,000-sf building. It will vacate the building in 2015.

Investor interest in both Quebec Court II and I was quite high from diverse groups: one looking for a secure yield investment and the other for a value-add opportunity, said Winn.