GSA-Leased Office Building for Sale in Aurora, Colorado

Thursday, July 26, 2018

Holliday Fenoglio Fowler, L.P. (HFF), on behalf of the owner, is marketing an office building for sale at 16401 East Centretech Parkway in Aurora, Colorado. The property is a 116,500-square-foot office building located approximately 13 miles from downtown Denver. Built in 1998, the three-story building is currently fully leased to the Defense Health Agency (the “GSA”). While the GSA currently occupies the entire building, it recently signed an extension that is structured to take effect at the conclusion of building and tenant-improvements specified in the lease (delivery anticipated for the first quarter of 2019). As part of the 15-year extension (10 years firm term), the GSA will be downsizing to 87 percent from 100 percent of the building, allowing for lease-up of the vacant space.

Aurora, Denver’s strongest office market, is a suburb located approximately 10 miles east of downtown. The office building for sale is less than five miles from the Fitzsimons Medical Campus and Life Science District, a $5.2-billion redevelopment that will employ nearly 50,000 people at full build-out. Additionally, the property is located approximately 15 miles from the Denver International Airport, which serviced more than 61 million passengers in 2017. Access to 16401 East Centretech Parkway is provided by Interstate 225 (1.5 miles away) and 6th Avenue (less than one mile away), two of Denver’s main thoroughfares.

In 2016, a receiver was appointed to oversee a portfolio of properties, including the subject, and it has maintained oversight of the properties since. The subject transaction will be a receivership sale, in which ownership will be transferred to the winning bidder.

Office Building for Sale Investment Highlights

  • Long-Term GSA Tenant:  Upon completion of the GSA’s buildout, the property will be 87 percent leased to the GSA – Defense Health Agency (S&P: AA) – with 15 years of remaining term. Investors will be able to collect a consistent NOI while also having the ability to add value via the lease-up of the vacant space.
  • Proximity to Mission-Critical Demand Drivers:  16401 East Centretech Parkway is surrounded by demand drivers critical to the GSA, including the Fitzsimons Medical Campus, Denver International Airport and Health One Medical Center.
  • Strong Performing Submarket:  The office property for sale is located in the Aurora office submarket, Denver’s strongest submarket, which is home to more than 8.6 million square feet that is collectively 91.5 percent leased. Prior to 2017, the submarket experienced positive absorption for eight consecutive years. Additionally, the submarket has seen positive rent growth for five consecutive years.
  • Upcoming Renovations:  16401 East Centretech Parkway is scheduled to undergo a significant renovation upon the finalization of the budget for same. Renovations will be compliant with the GSA lease, and costs will be allocated based on an agreement between the landlord and tenant. The landlord is in process of bidding out renovations and working to finalize a budget.
  • Strong Access and Amenity Base:  The FasTracks A Line was recently completed, connecting Union Station to Denver International Airport. That, along with the 2017 opening of the R Line, gives Aurora unprecedented access to the CBD, Southeast Corridor and DIA. Additionally, the property enjoys excellent proximity to Interstate 225 and 6th Avenue, two of Denver’s main thoroughfares. This prime location allows tenants to enjoy quick and convenient access into downtown Denver and the office building for sale’s surrounding retail amenity base.

For more information on this GSA-leased office building for sale or other commercial properties in and around Denver, please contact either Jules Sherwood or Nate Perry in HFF’s Denver office. Click here for current listing of our commercial real estate properties available for sale.

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