An investor bought a two-property workplace asset in Littleton with plans to renovate and modernize the 40-year-old suburban buildings.
Pantheon Viewpoint LLC bought Viewpoint I & II, a 93,069-square-foot, two-building, Class B workplace campus at 7901-7921 Southpark Plaza, from vendor IBC Denver VII LLC for $12 million. John Witt and Ben Swanson of Quiver Investments represented the customer, whereas Riki Hashimoto and Dan Grooters of Newmark Knight Frank represented the vendor.
The sale was a part of the customer’s 1031 trade. In accordance with Witt, the customer traded from an out-of-state asset it had owned for over 100 years in multigenerational possession. With three different Colorado workplace properties, the customer expanded its in-state presence with the acquisition.
Collectively, the properties have been 72% occupied on the time of the sale, with tenants representing a variety of industries, together with engineering, well being care and regulation. Witt stated the entire tenants remained secure following the onset of COVID-19.
Whereas many buyers have been cautious of buying workplace properties firstly of the pandemic, Witt stated the customer remained assured within the suburban workplace market and noticed promise within the south Denver location, the place there’s a massive tenant base and fascinating surrounding housing and facilities.
“The customer is fairly bullish on the suburban workplace market basically. It believes the suburban market isn’t going to be as distressed post-COVID-19 as different sectors, comparable to city workplace or retail, so it was actually snug investing on this asset,” Witt stated.
“The customer envisions suburban workplace having a resurgence in reputation, so it desires to reinvest within the infrastructure of the buildings, to tailor it to tenant comfortability and optimize the property’s effectivity,” Swanson added. “As a substitute of simply doing the apparent beauty modifications, the customer goes to enhance the HVAC system and the buildings’ buildings.”
In accordance with Witt, the customer plans to modernize the property’s inner HVAC system by making it extra customizable suite by suite. The customer believes this enchancment will permit for tenants to have extra management of their very own area, a fascinating property function in a post-pandemic market.
Whereas COVID-19 didn’t part the customer’s optimism, it did pose challenges to closing the sale, Swanson stated. Because of the pandemic, the IRS applied an identification deadline extension however not a closing extension, which allowed the staff extra time to establish a property within the purchaser’s trade however then shrunk the closing course of. Nevertheless, despite juggling these deadlines, the staff was in a position to shut the sale of time.
Swanson stated the customer anticipates attracting extra tenants to the property following its capital enhancements, although there isn’t any set timeline in place for when these shall be accomplished. The customer will work with a separate personal entity to handle and lease the property going ahead.
Featured within the September 16-October 6, 2020, subject of CREJ