Skip to main content

DPC, Bridge Investment Pay $143.65 Million for Denver West Business Park

December 3, 2018



DPC, Bridge Investment Pay $143.65 Million for Denver West Business Park

Denver-based DPC Cos. and Bridge Investment Group have acquired Denver West Business Park, a 20-building, 1.3 million-square-foot campus in Lakewood, in the largest deal of its kind to close this year. The price wasn’t disclosed, but Jefferson County records show the park sold for $143.65 million. DPC and Bridge plan to invest $16 million in the campus over the next three to four years. DPC will oversee all leasing, property management and redevelopment work. “Denver West has incredible untapped potential,” said Chris King, CEO and president of DPC Cos. “Having grown up less than a mile from the campus, I’ve watched the west side of Denver evolve tremendously over the years. Denver West is the next frontier for office space in a community where millennials want to live and find balance between work and play. With strategic renovations, we will reintroduce Denver West as a next-generation workplace that will not only change perceptions of the campus, but will also prepare the entire area for the rapid growth ahead.” Spanning nearly 83 acres, Denver West is the largest business park in the west suburban Denver office market. The campus is comprised of 20 two- to five-story office buildings ranging in size from 21,000 to 98,000 square feet. Planned building improvements include modernizing lobbies, elevators, restrooms, entrances, corridors and landscaping. Additional improvements include updated signage, the creation of new trail systems and expanded gathering spaces for tenant and community events, including paddle boarding and lakeside gazebos. Built between 1974 and 1981, Denver West has undergone more than $25 million in capital improvements since 2014 and is 78 percent occupied. Recent renovations include roof replacements for all 20 buildings, base building repairs and $8.1 million in accretive cosmetic investment. Occupancy has increased 17 percent in approximately four years. CBRE’s Tim Richey, Mike Winn, Charley Will, Chad Flynn and Jenny Knowlton represented the seller. DPC Vice President Justin Lutgen represented the buyers. (Colorado Real Estate Journal)



Denver Office Absorption Ranks Third Among Top Markets

The Denver metro area has climbed to third in the country for net absorption of office space, behind only the gateway cities of San Francisco and Midtown Manhattan, New York. “This city is gobbling up office space with the likes of New York and San Francisco, and you offer higher returns,” Kevin Thorpe, Cushman & Wakefield chief economist and global head of research told a crowd at the brokerage firm’s Denver Client Luncheon Oct. 29. Net absorption in Denver was 2.2 million square feet through the third quarter. The vacancy rate for office space inched up to 15.7 percent metro wide, around the historical average, and that’s a good thing, said Thorpe. “It’s keeping rents relatively affordable,” he said, adding rent growth, which ranged from 5 to 7 percent over the last few years, has slowed to 3.7 percent. Meanwhile, Denver is on pace to create 40,000 jobs this year, about a quarter of which are office-using jobs, according to Thorpe. So, even though Denver is one of the top markets in the country for construction of new office space, with almost 5 million sf to be delivered through 2020, overbuilding is “probably not” an issue, he said “I’m actually more concerned about the older product going forward,” he said. With 60 percent of the metro area’s office product built before 1986, Thorpe said building owners who haven’t already done so need to invest in renovations to be competitive. Coworking has experienced “remarkable growth” both in Denver and across the country but represents less than 1 percent of U.S. office inventory and less than 0.5 percent in Denver. Thorpe also touched on the Denver multifamily, industrial and retail markets, and provided an overview of the U.S. economy He sees no slowdown in Denver’s industrial market; he said retail is “misunderstood,” with sectors like restaurants, fitness clubs and other “experiential” retail thriving; and said, “I think we have years of very strong demand for multifamily.” However, “Denver is becoming very expensive,” with the median home price accelerating from $244,700 10 years ago to $444,933 today – the ninth highest level in the country and higher than Washington, D.C. “You’ve got to build more, build more houses, more multifamily. Don’t let Denver become so unaffordable that young people leave,” he cautioned, noting young workers are key to sustaining the office, retail and industrial markets. The U.S. economy is “by nearly every relevant economic metric … in very good shape right now,” Thorpe said. Most members of the National Association for Business Economics, the top professional association for business economists, believe expansion will continue through 2019, he said. Yet, there is “anxiety” over the length of the current cycle, interest rates, tariffs and other factors. It’s tempting to assume higher interest rates will mean lower real estate values, Thorpe said, adding history indicates the negatives of higher rates more often than not are outweighed by positives of a boost in operating revenue. Value-add assets typically benefit the most because higher interest rates signal better lease-up, while core assets are more exposed, he said. (Colorado Real Estate Journal)