Colorado Real Estate Journal -
A real estate investment trust acquired The Travelers Indemnity Co.’s regional headquarters building in Greenwood Village for $16.1 million, or $123 per square foot. Griffin Capital Corp., on behalf of Griffin Capital Net Lease REIT Inc., bought the three-story, 130,998-sf building from St. Paul Fire and Marine Insurance Co. Travelers executed a 12-year lease extension as part of the deal. “Our ability to respond creatively to the tenant’s needs allowed us to execute a lease extension and acquire a quality asset with a stable, long-term income stream secured by an organization with over 100 years of continuous operating history,” Louis Sohn, Griffin Capital’s senior vice president of acquisitions, said in a statement. Sohn said Griffin Capital sees Denver as a dynamic and growing market. “We see a lot of positive momentum in the Denver market,” he said. “We are excited to acquire a solid office property in a growing market with great liquidity. From a credit perspective, we could not be more pleased about adding another fortress balance sheet to our growing roster of blue-chip tenants,” added Michael Escalante, Griffin Capital’s chief investment officer. The strong credit tenant drew plenty of other investors to the offering, according to Cushman & Wakefield of Colorado broker Mike Winn. Winn, along with C&W brokers Tim Richey and Chad Flynn, handled the sale. Located at 6060 S. Willow Drive, the building is close to the Arapahoe at Village Center Station, plus, “Being in the Denver Tech Center is just a great address to have,” Winn commented. Known as Atrium II, the building has a “spectacular” atrium and sits on a 6.36-acre site with Interstate 25 visibility. It has 4.28 parking spaces per 1,000 sf, including 155 covered parking spaces. Including the two-story parking structure, the property has had more than $5 million worth of capital improvements over the last seven years. The building was built in 1982. Travelers has been a tenant in the building since 2005. Travelers Indemnity, which carries a standalone credit rating of AA from Standard and Poor’s, provides an array of private and commercial insurance products and services. It is the largest of six major subsidiaries that comprises the Travelers Companies Inc. The new triple-net lease extension provides 4 percent average annual increases over the 12-year term and allows Travelers Indemnity to secure long-term occupancy. The asset’s purchase price represents a 7.61 percent initial capitalization rate on in-place rents. Griffin Capital Net Lease REIT Inc. is a publicly registered, nontraded REIT with a portfolio that includes 11 office and industrial distribution properties totaling approximately 2.8 million rentable sf and a total capitalization in excess of $300 million. Its properties include a 170,000-sf industrial building in Loveland. The REIT’s sponsor is Griffin Capital Corp, a privately owned real estate company headquartered in Los Angeles. Griffin Capital and its affiliates own and manage a portfolio of more than 11.1 million sf of space in 27 states.