Suburban Denver Office Building for Sale

Wednesday, April 4, 2018

Holliday Fenoglio Fowler, L.P. (HFF), on behalf of the owner, is marketing for sale Church Ranch II, a suburban office building in Westminster, Colorado, that serves as the 63,057-square-foot western regional headquarters of Staples, Inc. Staples has recently signed a new, 130-month lease with two five-year options for 100 percent of the property. Church Ranch Building II offers investors a single-tenant, 100-percent net leased asset with a brand new long-term lease in one of Denver’s premier large corporate user submarkets.

The property is located at 10249 Church Ranch Way in the Northwest Denver Office submarket. This area, which spans along U.S. 36 from downtown Denver to Boulder, is a vibrant office market that caters to a variety of technology tenants, corporate headquarters and is home to several research institutions. Church Ranch II is ideally positioned within the Westminster micromarket, a highly-sought-after and 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.

Church Ranch II is strategically located with proximity to many major employment pools, including Broomfield, Westminster, Arvada, Boulder and Denver. Companies have found this location more attractive, as they have a broader employee base from which to pull. There are more than 168,000 residents within a 20-minute drive time of the property. These residents boast an average household income of $112,777, which is significantly higher than the national average of $59,000. Furthermore, 48 percent of the surrounding population has a bachelor’s degree or higher.

Westminster Office Building for Sale Investment Highlights

  • Secure and Growing Cash Flow on a Long-Term Basis:  Staples, Inc. (Staples), the division formerly known as Staples Business Advantage, has recently signed a lease for the entire building for a 130-month term expiring in 2028, which offers an investor more than 10 years of secure income. Annual rental escalations and the lease’s net recovery structure provide significant risk adjusted returns while being a hedge against inflation. Staples was taken private by Sycamore Partners in late 2017 for $6 billion. Staples shed all operational businesses outside of North America after they went private and now comprises three distinct and separate companies: Staples, Inc., Canadian Staples and US Retail. Each company stands alone and has no legal or financial crossover. The tenant at Church Ranch II is Staples, Inc, and, within their space at the property, they house the company’s western headquarters for Contract Services, North American Delivery, corporate IT, Cybersecurity, B2B goods and services and HR functions. The single-tenant profile and triple-net-lease structure leads to limited new investor management duties. The Staples lease allows for the pass-through of all operating expenses excluding only those for structure and roof.
  • High Quality Asset:  Built in 2000, Church Ranch II was designed to accommodate both multi-tenant and single-tenant users desiring to office in the Northwest Office submarket with quick and convenient access to U.S. 36.  Current ownership has committed $3.077 million ($48.81 per square foot) and has already paid $2.75 million ($43.62 per square foot) in tenant Improvements. Staples has invested more than $3.785 million ($60.03 per square foot) of their own capital for their new space, which demonstrates commitment to the property and submarket. Church Ranch was constructed in 2000 with large, efficient floor plates of approximately 31,500 square feet that are ideally designed for today’s corporate user. Additionally, the property has a strong parking ratio with five per 1,000 square feet, which includes an easement for overflow parking in Church Ranch Building IV’s lot directly next door.
  • Proximity to Wide Amenity Base:  Tenants enjoy excellent proximity to retail, dining and hotel amenities off Church Ranch Boulevard and West 104th Avenue. In addition to numerous fast casual restaurants and retail shops at the nearby Shops at Walnut Creek and Westminster Promenade, Church Ranch is within a mile of 988 hotel rooms. Etkin Johnson Real Estate Partners is currently developing a Hyatt Place between the Marriott and the SpringHill Suites, which will deliver an additional 137 rooms in 2018. The property also provides immediate access to extensive hiking and biking trails that connect to Denver and Boulder and features onsite showers and bike lockers. Such an extensive amenity base is a tremendous attribute for visiting business travelers and employees alike.
  • 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.

For more information on this commercial property or other office properties for sale, please contact Jules Sherwood or Nate Perry in HFF’s Denver office.  Click here for our real estate investment sales search page for a current listing of commercial properties available for sale. 

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