Los Angeles-based Farmers paid $168.60 per sf for the buildings in the Park Meadows Corporate Center. The fully leased buildings are occupied by the University of Phoenix and Nextel Corp., CB Richard Ellis broker Ron Urgitus told GlobeSt.com. Urgitus and fellow broker Tim Swan have negotiated the sale.
"In my opinion, this sale sets a new benchmark,'' says Urgitus. Spiral Development is the seller of the buildings - a combined 135,144 sf - at 10002 and 10004 Park Meadows Drive, situated at the intersection of C-470 and Interstate 25.
The only regional deal that has exceeded this one is a $171 per sf transaction that Peter Savoie, a Cushman Realty broker in the Denver office, says he quietly sold, with the lead tenant being Time Warner Co.
The 60,144-sf University of Phoenix building was completed last year and the 70,0000-sf Nextel building earlier this year. Both companies have long-term leases in their respective buildings, says Urgitus. "These are the first buildings Farmers has purchased (here) for quite some time. It's a case of new money coming into Denver," he says. "It shows that the market is seen as a very strong market, to attract a buyer with such great name recognition." And, he says, it also shows new, well-located buildings along the corridor are valued almost as highly as those in the Tech Center, the premier business park for many years.
He is attributing the sale to the dynamics of the southeast corridor coupled with its freeway access and ample signage. With the proximity to C-470 and the E-470 toll road, employers have access to workers as far east as the bedroom communities Aurora, as well as Castle Rock and Highlands Ranch, the largest master-planned community in the Denver area. Employees are drawn to the area because they can avoid the congestion north on Interstate 25, he assesses."It is at all the major arteries, which is a lot of the reason why companies are coming there and why Farmers was so excited about it," says Urgitus. "They're at ground zero."
Brad Neiman, senior managing director of Mile High Properties, says the deal has edged out the area's previous record of a property in nearby Meridian International Business Park. Opus Northwest also has sold a building in the Inverness Business Park for about $163 per sf while the Crescent VI building in the Denver Technological Center recently went for $169.66 per sf.
"Based on the cost of new construction and lease rates, prices will continue to go up," says Neiman, who was not involved in the Farmers' deal. "We are not going to see values stop atthis level." He likens the deal "to J.P. Morgan buying 17th Street Plaza downtown. I think whether we're talking about the Central Business District or in suburban office parks, the perceived health of the Denver economy increasingly is attracting new institutional investors."
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