DENVER-Denver's office investment market in 2013 is increasingly strong, with 3.4 million square feet valued at $641.1 million trading hands in the second quarter alone, according to recent numbers from Newmark Grubb Knight Frank. Year-to-date, 5 million square feet traded, valued at just under $900 million.
The investment market is poised to well exceed 2012's total of 10 million square feet sold, valued at $1.6 billion, says the firm. In the recent quarter's largest sale, Franklin Street Properties purchased 1999 Broadway from a joint venture of Broadreach Capital Partners, Equity West Investment Partners and Pearlmark Real Estate Partners. The 680,000-square-foot, 43-story office building sold for $183 million, or $269 per square foot.
According to Riki Hashimoto, executive managing director of the firm, “Denver has matured into a top 10 market in the country, with national and international investors committing to Denver.”
Currently, he says, “everyone wants to participate—from core and core-plus institutional groups, value-add and entrepreneurial equity to local operating partners with both institutional and private equity sources. Denver is drawing much of this attention because we are seen as a stable inland market with good macro-economics and a nice alternative to the highly competitive gateway cities.”
However, he adds, that big question on everyone's mind today is “how will this dynamic interest rate environment affect our investment activity?” That, he says, is a trend the firm is “carefully watching.”
We will continue to follow this topic as we learn more.
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