USAA Real Estate Spends $73M for FBI Building in Denver
The LEED-certified building was developed as a build-to-suit in 2010 for the FBI and was designed and built according to specifications of the Government Services Administration.
DENVER—USAA Real Estate, the real estate arm of San Antonio, TX-based insurer USAA, has acquired a more than 175,000-square-foot office building here that is fully leased to the Federal Bureau of Investigation for its Colorado and Wyoming field operations
The 175,155-square-foot property at 8000 East 36th Ave. was sold by the US division of U.K.-based commercial real estate investment and management firm 90 North Real Estate Partners for $72.9 million. In 1994, 90 Real Estate Partners used its investment in the property as its entrée into the US market.
The LEED-certified building was developed as a build-to-suit in 2010 for the FBI and was designed and built according to specifications of the Government Services Administration. The current lease is the original, build-to-suit 20-year term. According to JLL, which brokered the transaction, the renewal probability for first generation assets that are 100% leased to the federal government of this size and quality exceeds 94%.
The FBI Building, which is located in the Stapleton District of Denver, includes approximately 144,000 square feet of office space. An annex totals an additional approximately 31,000 square feet. The 9.9-acre site provides additional land for 44,000 square feet future expansion opportunity. The property also includes 365 parking spaces.
“This asset has been a great investment for 90 North, and our partner DIMAH Capital…” says Daniel Cooper, Head of North American Operations, 90 North Real Estate Partners. “The continued growth of this sector of the Denver market along with the stability of the tenancy of the FBI have proved to be a great combination and will serve the new owners well for years to come.”
JLL EVP Brian Saal and Marc Rampulla, who specialize in capital markets transactions for government occupied real estate, as well as local Denver Capital Markets expert Patrick Deveraux, led the JLL team handling the sale. Keith Largay, Brian Walsh and Baxter Fain led the JLL team handling the acquisition financing for USAA Real Estate.
“Given the deal quality and profile, we were able to attract a deep pool of interest from a mix of private and institutional investors. The lack of comparable investment opportunities available in the market enabled us to achieve a high level of competition for our client,” says Rampulla, co-leader of JLL’s government capital markets team.
Throughout the transaction’s holding period, 90 North provided asset management services, while day-to-day management of the property was handled by Newmark Grubb Knight Frank.