Two-Building Office Portfolio near Denver Is On the Market

Thursday, April 20, 2017

Holliday Fenoglio Fowler, L.P. (HFF) is marketing for sale Church Ranch Buildings II and IV (Church Ranch or the property), two office buildings totaling 183,664 square feet in Church Ranch Office Park in the Denver suburb of Westminster, Colorado. Built in 2000 and 2001, Church Ranch was designed to accommodate both single-tenant users (Building II) and multi-tenant users (Building IV) desiring office space in the Northwest Office submarket with quick and convenient access to U.S. 36.

Building IV is a four-story multi-tenanted property that is currently 86 percent leased. The property has enjoyed strong leasing momentum with four tenants taking approximately 20 percent of the net rentable area since 2016. With interest from a national tenant in the two-story Building II, Church Ranch has the potential to increase its occupancy from 61 percent to 91 percent in a very short time frame. Additionally, the property has a strong parking ratio with 4.40/1,000 square feet, which includes 74 covered parking spaces at Building IV.

The property is situated in the Northwest Office submarket. This area, spanning along U.S. 36 from Denver to Boulder, is a vibrant office market that caters to a variety of technology tenants, corporate headquarters and is also home to several research institutions. Church Ranch is an attractive option to office tenants desiring high-quality space, excellent access to amenities and close proximity to U.S. 36 while offering competitive rental rates and lower operating structures than many of the nearby competitors.

Tenants enjoy excellent proximity to retail, dining and hotel amenities off 104th Avenue. In addition to numerous restaurants and retail shops at the nearby Shops at Walnut Creek, Church Ranch is within a mile of the Denver Marriott Westminster, SpringHill Suites by Marriott Denver North/Westminster, Drury Inn & Suites Denver Westminster and the Westin Westminster. Etkin Johnson Real Estate Partners is currently developing a Hyatt Place between the Marriott and the SpringHill Suites, which will deliver in 2018. Such proximity to an excellent amenity base is a tremendous attribute for visiting business travelers and employees alike.


Office Buildings for Sale Investment Highlights

  • Significant Upside Opportunity:  The seller is currently in negotiations with a national retailer to take 55,000 square feet in Building II, which would increase the occupancy to 91 percent and immediately strengthen the operating performance. Should this negotiation falter, Building II presents a unique lease-up opportunity as a new owner could pursue a single-tenant user or demise the space to a multi-tenanted structure. While Idol Minds occupies a small percentage of Building II, Idol Minds could relocate to building IV allowing a new user to occupy the entire building.
  • Outstanding Location:  The property is located in the Northwest Office submarket, which stretches from the outskirts of Denver up to Boulder along U.S. 36. Nestled at the base of the Rocky Mountains, this area has a highly educated populace, a strong labor pool, a recently revamped mass transit system and an improved U.S. 36 highway. The city of Westminster has more than 108,000 residents that boasts an average disposable income of $61,800, which is significantly higher than the national average of $40,600. Additionally, the median age is 36. All of these factors contribute to the desirability of employers choosing to office in Westminster.
  • Competitive Market Fundamentals:  Church Ranch offers lower asking rental rates and operating expenses compared to its peer set that charges on average $3 per square foot more in asking rental rates. Church Ranch also boasts lower property tax (millage) rates than its competitors at Circle Point, Westmoor and Interlocken. This greatly appeals to the cost-conscious office tenants looking for high-quality office space in good locations with reasonably priced rental rates.
  • Attractive Basis, Significantly below Replacement Cost:  Church Ranch is being offered at a deep discount to replacement cost, generating an attractive investment basis. Currently, suburban Denver office development costs are pricing at approximately $335 per square foot.

Investors may bid on Church Ranch Buildings II and IV exclusively through RealINSIGHT Marketplace’s online auction site beginning on Monday, May 15, and ending on Wednesday, May 17. For more information on this sale or other office properties for sale in the Denver area, please contact Jules Sherwood or Peter Merrion in HFF’s Denver office. To view HFF’s current real estate investment listings, please click here to be directed to HFF’s property search page.

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