Mike Noon, who heads his namesake company in Denver, confirms that Red Sea has let the contract to buy the property expire. Had the deal gone through, it would have been second-largest commercial real estate purchase thus far this year in metro Denver, second only to Fort Worth, TX-based Crescent Real Estate's $91 million purchase of the John Manville tower in Downtown Denver.
Match Kralis, of Red Sea's Dallas office, says that Merrill Lynch has asked him not to discuss the deal at this time. "But speaking generally, in the overall scheme of things, the market will come back in Denver and across the country," Kralis tells GlobeSt.com. "When will it come back? That's the crystal-ball answer that nobody knows."
Real estate brokers tell GlobeSt.com that they aren't surprised the deal collapsed. Though Red Sea was going to pay less than half the $100 million-plus that Merrill Lynch had invested in the campus, it still wasn't enough of a discount, considering the current state of the market. Also, the building isn't easy to divide for smaller tenants, and there isn't much market in the soft Denver area at this time for big users.
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