By Gail Kalinoski, Contributing Editor
Buchanan Street Partners and Lowe Enterprises acquired Parkridge, a 192,800-square-foot, Class A office property in a Denver suburb for a reported $34 million from a Miller Global Properties L.L.C. affiliate.
The six-story building was developed in 2001 and is located at 10375 Park Meadows Drive in Lone Tree, Colo., part of the southeast Denver submarket. ?It is 93 percent leased with tenants including CNA Insurance, Merrill Lynch, UBS, Nestle, Ameriprise and the U.S. Department of Defense.
?Parkridge 4 is the highest quality office building in the emerging submarket of Lone Tree and is especially attractive given the outstanding credit of its tenancy and the project?s limited near term lease expirations,? said Tim Ballard, president of Buchanan Street Partners. ?The property?s strong rent roll, excellent locations and physical quality allowed it to be accretively financed, further enhancing Buchanan?s expected investment returns.?
Robert J. Dougherty, executive vice president with Buchanan Street Properties, told Commercial Property Executive that except for one tenant, most of the leases extend to 2018 and beyond.
?The extended lease terms allowed us to get very attractive financing,? Dougherty said of the 10-year fixed-rate loan obtained through 40/86 Mortgage Capital of Indianapolis and arranged by John Stewart of Northmarq Capital in Denver.
Nathan Johnson and Austin Kane of Newmark Grubb Knight Frank were hired to manage leasing.
Miller Global Properties was represented by Mike Winn and Tim Richey of Cushman & Wakefield. Buchanan Street Properties and Lowe Enterprises represented themselves in the deal.
?This is a high quality property and an excellent addition to our expanding Denver office portfolio,? said Rick Newman, president of Lowe Enterprises Real Estate Group, which will provide asset management and services. ?We appreciate the opportunity to participate in the acquisition and management of Parkridge 4 in another venture with Buchanan Street Partners.?
Dougherty said the firms owned an office property in Houston for about five years before selling it in December.
Houston is a market where Buchanan Street Partners has recently stepped up its acquisitions. In March, the California-based firm bought The Offices at Kensington, a Class A, two-building property in Sugar Land, Texas, from an affiliate of KBS Capital Advisors. The 170-774-square-foot buildings were 90 percent occupied with tenants including Morgan Stanley, Progressive Insurance and Humana Health.
The price of the Sugar Land property was not released but in June Buchanan Street Partners said it paid $26.2 million to Panattoni Development for two office buildings in the Beltway 8 Corporate Centre in Houston. The 261-413-square-foot, Class A office buildings are located in the Techway Corridor and 76 percent occupied with tenants including Allstate Insurance Corp. and Mercer Consulting.
?Houston is a place that?s held a lot of appeal for us given the tremendous job growth and rental appreciation,? Dougherty said.
Also in Texas, Buchanan Street Properties has been active in Austin, where it purchased four multi-family properties with a total of 1,100 units with the last year, he said.
Buchanan Street Properties is also eyeing the Phoenix market for investments.
?It has not yet experienced the same kind of resurgence the Texas markets have, but we like the long-term story for quality of life and cost of living,? Dougherty added.
The company also continues to look closer to home for assets, including Rancho Cucamonga, Calif., where it acquired a 75,000-square-foot Class A office building for $10.6 million in July.
Buchanan Street Partners has also been active in the bridge loan market, where there has been demand for whole and mezzanine loans. The firm has originated about seven loans in the last 18 months, Dougherty said.
Meanwhile, Lowe Enterprises has focused more on hotel acquisitions in the last year, purchasing Hotel Derek, a 314-room independent boutique hotel in the Galleria section of Houston, in July. An affiliate of Lowe Enterprises is managing the 14-story hotel. Other hotel acquisitions include the 213-room MileNorth, previously known as the Affinia Chicago Hotel, and Embassy Suites Chicago-Northshore/Deerfield. Both were purchased on behalf of institutional clients. Last October, the firm acquired another Denver office property ? the Denver Club, a 231,454-square-foot historic building in the city?s downtown area. The purchase was made on behalf of a pension fund client.
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