There were several notable sales that recently hit the Denver area commercial real estate market. First up is the Halcyon, a luxury hotel in Cherry Creek that traded for $86 million. A new high for a Denver area luxury hotel at $524,390 per room. Sage Hospitality and BMC Investments were the previous partners that sold the property to Rockbridge Capital. The founder of BMC Investments has a local investment team that will keep a minority stake in the deal, according to a CoStar article. The sale also included the Halcyon brand.
An interesting fact about this transaction was that it beat out the purchase of the luxury hotel Ritz-Carlton on a per room or key basis, which sold for $100 million, $496,000 per key. The new owner plans to upgrade the 3-year old hotel but have not disclosed details about future improvements. The Departure restaurant closed its doors, but Quality Italian and the hotel bar B&GC plan to stay at the property. The new owners are banking on the luxury brand, premiere location, and improving the property.
Next up is the 109,078 square foot Union Station North Wing office building that fetched $76 million. A division of GLL Real Estate Partners sold the office building at 1705 17th Street to Lincoln Property Company. Union Station North Wing held the record five years ago as the highest office sale at $65.5 million. According to CoStar, the average price per square foot for office buildings has jumped 27 percent over the last 5-years to $407 per square foot. The anchor tenant is IMA Financial and the building currently has no vacancy.
Another large deal that was just announced was the Denver FBI Office located in Denver’s Stapleton neighborhood. The building at 8000 East 36th Street is in the Central Park West neighborhood of Stapleton and just a few blocks away from the Light Rail stop at Central Park Station. USAA Real Estate acquired the building for $72.9 million according to the Denver Business Journal. The FBI has the 175,155 square foot office building leased through 2029.
CoStar reported that there was a lot of interest in the building due to lack of inventory and the quality of a tenant like the FBI. The Denver Business Journal reported that the property includes an almost 10-acre site that has space for an expansion of 44,000 square feet. The Stapleton neighborhood has limited office space at the moment, but with Forest City selling to Brookfield there could be more speculative office development activity coming down the pipe very soon in Stapleton.
Lastly, one of the largest deals of the year so far was AvalonBay Communities purchasing an apartment complex in Aurora. The Ridge at Wheatlands was sold by Grand Peaks Properties for $91.25 million, according to Denver Business Journal research of Arapahoe County public records. Surprisingly, it is only the third largest multifamily deal in Denver and the metro area to start off 2019. The apartment complex at 6855 South Langdale Street in Aurora sold for $269,230 per unit and comprised of 338 apartments. The appetite for Denver area multifamily continues to show strength with Q1 sales hitting $706 million according to recent reports.