Crown West taps into Boulder ‘resurgence’

By Jill Jamieson-Nichols

Colorado Real Estate Journal

BOULDER, CO – An investor that’s been active in the Denver market has tapped into what it views as a resurgence in the Denver-Boulder office market. Crown West Realty paid $10.9 million for a two-story office building at 5775 Flatiron Parkway in Boulder, a property where most of the leases were completed within the last 18 to 24 months.

The building’s activity is reflective of what’s happening in Boulder and on down the corridor, said Kevin Richey, who heads Crown West’s Denver office.

“In speaking to brokers in the area, they say that activity is fierce,” said Richey, noting Arista’s first office building in Broomfield was filled up upon completion, and at least one new office development is in the works on the U.S. Highway 36 corridor to meet market demand.

Richey attributed the activity to a surge in the renewable energy sector and a resurgence in the technology sector. Boulder, meanwhile, maintains barriers to new development.

“All of those developments come together to create a very tight market,” Richey said. “We see that as a strong market with a price-per-pound attractiveness to it.”

Crown West bought the Flatiron Parkway building from Invesco Real Estate for $114 per square foot, which was very appealing considering the quality of the building and the tenancy versus the cost of new construction, Richey said.

The 96,000 sf building is 96 percent leased. Its largest tenant, Wall Street on Demand, is undergoing an expansion that will take its occupancy to approximately 26,000 sf. Vexcel Corp., a Microsoft subsidiary, occupies approximately 20,000 sf, followed by Konica-Minolta at 18,000 sf. CH2M Hill and SimAuthor Inc. also are tenants.

Located just north of Arapahoe Road and east of 35th Street, the building has easy access to Foothills Parkway, U.S. Highway 36 and the University of Colorado, Crown West noted.

The acquisition was Crown West’s fourth in the Denver area since the onset of the credit crunch.

“We have access to financing through our banking relationships that a lot of investors don’t enjoy, and because of that we’re able to structure moderate loan-to-value loans with our lenders,” Richey commented.

CB Richard Ellis brokers Richard Damm and Dave Buck will handle leasing of the property. CBRE brokers Mary Sullivan, Tim Swan and Ron Urgitus represented Invesco in the transaction.

Crown West Realty, a full-service real estate investment, development and management firm formed by Petrus Partners Ltd., now owns seven assets in the Denver metro area. The Petrus Partners-Crown West group owns and manages 8 million sf of office, industrial, mixed-use and land-development properties nationwide.