05
Jan

Centre Point Properties buys Wheat Ridge office building

by Jill Jamieson-Nichols
COLORADO REAL ESTATE JOURNAL

A Denver company purchased a 77,980-square-foot office building in a suburb it thinks will benefit as downtown rents continue to escalate.

Centre Point Properties acquired Clear Creek Office Park at 4251 Kipling St. in Wheat Ridge for $7.8 million. The five-story building historically averages 85 percent or higher occupancy, but was 75 percent leased due to the loss of a large tenant while it was under contract, according to Centre Point President Tucker Manion.

“We placed the asset under contract when it was about 85 percent occupied and lost a tenant during due diligence. The buyer elected to continue to purchase the asset, and it became a very unique value-add opportunity for them,” said JLL’s Patrick Devereaux, who represented the seller with JLL’s Jason Schmidt.

Manion believes certain suburbs will see rising rents as downtown rents climb further and that Clear Creek Office Park is well positioned to ride that tide.

There’s a fairly captive audience of office tenants in the market, which has held up well during ups and downs in the real estate cycle, he said.

“What we like specifically about the building is that in this submarket there’s very little supply of office space. Of the office space that is there, we feel this building is best in class,” Manion said.

“Rents in the west submarket have not increased as significantly as some of the other submarkets, such as downtown and southeast suburban,” said Devereaux. “We’re starting to see more leasing activity on the west side of town and also more upward pressure on the lease rates.”

Devereaux said the Class B building appeals to tenants that don’t want to pay for higherpriced space on Union Boulevard and in Denver West or that want different access than those areas provide.

Clear Creek Office Park was constructed in 1982 and updated in 2013-2015. Centre Point Properties plans minor improvements to the common areas – paint and carpet, for example – but Manion said, “There isn’t a lot of renovation we’re going to have to do to the property.”

New Clear Creek LLC, led by Stu Ogilvie, sold the building, which it has owned an operated since 1999.

“They owned and operated that asset as a long-term hold, and it was in great capital condition,” Devereaux said.

Martin/Martin Consulting Engineers designed and developed the building, which it occupied for several years.

Karen Klerman of Wells Fargo arranged financing for Centre Point’s acquisition of the property.

Clear Creek Office Park houses approximately 20 tenants that range in size from around 800 to 2,500 sf.s