KBS Puts Denver Office Tower Up for Grabs
KBS Realty is marketing a Denver office building valued at close to $200 million.
The 563,000-square-foot Granite Tower, at 1099 18th Street in the Central Business District, is 95% leased.
Anadarko, the oil and energy conglomerate, leases 61% of the space, or 343,000 sf. Among the 13 other tenants are law firm Jackson Kelly, mining firm Bill Barrett Corp. and EverWest Real Estate. The property includes retail space leased to a restaurant and a coffee shop.
The estimated value is $350/sf, or $197 million. CBRE is advising KBS, an investment manager in Newport Beach, Calif.
The 31-story building, which is between Arapahoe and Curtis Streets, was developed in 1983. KBS, acting via its KBS REIT 2, acquired it in 2010 from Granite Partners of Dallas for $149 million, or $265/sf.
Denver has long been a hub for banking, energy and finance companies, as well as government agencies. Over the past five years or so, it has increasingly attracted technology and media companies.
The increased demand has fueled construction. Last year, some 960,000 sf of office space came on line. Nevertheless, the occupancy rate held steady at 85.4%, according to Marcus & Millichap. Another 2.3 million sf is scheduled to be completed this year. The brokerage projects that will push down the occupancy rate by 20 bp.