The office park covers 9.53 acres at 7808 Cherry Creek S. Drive, about 25 miles southwest of Denver International Airport. It was developed between 1984 and 1996 and is 93% leased to 29 tenants.
SKB sees potential revenue growth at the park as leases expire because in-place rents are approximately 10% below estimated market rates, according to Todd Gooding, principal and chief investment officer of SKB. "On the back end, the property can be sold as one investment, or buildings can be subdivided and sold as separate investments," Gooding says.
The sale of the office park, brokered by David Danick of Grubb & Ellis Co., translates to $105 per sf and an 8.11% cap rate on the projected first year net operating income. SKB plans to hold the property for between six and eight years, expecting a first-year cash-on-cash return of 7% and a projected IRR of 16.4% to 17.8%.
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