Brookfield Property Group has sold its 51 present interest in 1801 California, a downtown office tower in Denver, for $285.6 million. It is considered Denver’s second-tallest tower.
PNC Realty Investors, on behalf of the AFL-CIO Building Investment Trust, was the buyer. Brookfield retained a 49 percent interest in the asset.
The 1.3 million-square-foot office building with 23,400 square feet of retail space is valued at approximately $560 million, according to media outlets. Office tenants include technology companies SendGrid and Ibotta, law firm Fairfield and Woods P.C., and accounting firm BKD. Retail tenants include Ink Coffee and Guard & Grace steakhouse.
Brookfield purchased the 54-story, 709-foot-tall office tower in December 2011 for $215 million.
AFL-CIO is made up of 55 labor unions that represent 12.5 million people, according to its website.
Denver’s 2.6 percent unemployment rate again landed in the top two on the list of the nation’s lowest unemployment among large metros, according to JLL’s fourth quarter Denver report. It has remained in the top two for 19 months straight. The economy is strong; however, fewer jobs are available and a shortage of skilled labor may diminish user demand. Rising availability in parts of the market, paired with new construction is giving leverage to users to better negotiate deal terms. Landlords are offering increasingly competitive concessions to appeal to new tenants and retain existing ones. New construction is delivering with state-of-the-art finishes, so landlords would be wise to consider building upgrades in order to remain competitive.
The Denver metro office market added more than 2.5 million square feet of inventory during 2017, significantly more than the previous year’s total of 873,000 square feet, according to Colliers International. Current construction activity totals more than 4 million square feet. The CBD is set for the delivery of the largest office project since the 1980s, as the 662,000-square-foot 1144 Fifteenth building nears completion.
