Colorado Real Estate Journal -
ParkRidge Four, a Class A office building along Interstate 25 in Lone Tree, sold to a real estate investment management firm that likes what it sees in both the tenancy and the city. Buchanan Street Partners, in a venture with Lowe Enterprises, paid $34 million, or $176.75 per square foot, for the 192,359-sf building at 10375 Park Meadows Drive, near the intersection of I-25 and Lincoln Avenue. Miller Global Properties was the seller. The six-story building is 93 percent leased. CNA Insurance leases nearly a third of the building, which also houses Merrill Lynch, UBS, the Defense Contract Audit Agency and other tenants. “There was term left on those major leases,” said Mike Winn of Cushman & Wakefield of Colorado, who handled the transaction with partner Tim Richey “It’s a core property given the lineup of tenants, the quality of the building and the occupancy.” “The project has very high credit tenancy with CNA, Merrill Lynch, UBS, the Department of Defense, and it is a high-quality building as well, with great visibility, access etc.,” said Bob Dougherty, a partner in Buchanan Street Partners. “Because of the credit tenancy and the really limited lease exposure, we were able to finance it very creatively” so as to boost yields to investors. Winn said investors liked the location because of the its freeway frontage and accessibility, and also because ParkRidge Corporate Center is close to executive housing farther to the south in Castle Pines and Parker. “A lot of senior decision makers don’t want to go as far north as the Denver Tech Center. ParkRidge tends to attract decision makers that are in some of the affluent areas to the south,” Winn said. “We like that submarket of Lone Tree and what’s emerging down there with the new construction at the Kaiser hospital, and the residential and commercial farther south at RidgeGate. We feel like it’s an emerging micro market,” said Dougherty. Dougherty added that, “One of the reasons we were attracted to and comfortable with investing in the ParkRidge project is that we have such a strong local operating partner in Lowe Enterprises’ Denver team. We have a longstanding relationship with the seller, Miller Global, as well, so that certainly helped to complete the deal smoothly, and we’ve transacted extensively with the Winn-Richey team as well.” ParkRidge Four has great mountain views because it sits on an elevated site that drops off to the west. The Lincoln light-rail station is within a five-minute walk. Plus, “It’s one mile to Park Meadows and the surrounding area, so you’ve got 4 million square feet of retail that’s a mile away,” Winn commented. Built in 2001, the building has 33,000-sf floor plates and a 4.5:1,000 parking ratio. It features a two-story atrium lobby, an onsite deli, a conference room, and showers and lockers. Indianapolis-based 40/86 Mortgage Capital provided financing for the acquisition, which was arranged by John Stewart of Northmarq Capital. Nathan Johnson and Austin Kane of Newmark Knight Frank Frederick Ross will manage leasing. Newport Beach, Calif.-based Buchanan Street Partners, which through a joint venture owns the Shops at Walnut Creek in Westminster, owns office, retail, industrial and multifamily properties throughout the United States, and has been involved in $5.3 billion worth of transactions. It has owned numerous properties in the Denver area. “We would like to buy two or three more over time,” Dougherty commented.