Colorado & Santa Fe owns a $250 million-plus portfolio of properties, making it one of the largest privately held real estate investment companies in the state. Colorado & Santa Fe plans to spend another $6 million to $7 million upgrading the property. The 403,000-sf office tower at California and 17th streets, built in 1959, includes a 360-space, six-story parking garage. A typical floorplate is 10,436 sf.

The purchase is part of Arsenault's strategy to buy $100 million in local office properties this year. "We buy under-performing properties with high vacancies, high concessions or those that are hampered by high debt service," Arsenault says. "With our financial strength, we can buy for cash."

Arsenault says that Alec Wynne, a veteran broker, will be in charge of leasing the property. The building will be extremely competitive, Arsenault notes.

"In these tough economic times we've been offering cut-rate pricing," Arsenault says. "We also know that the customer want more than just affordable lease rates, they want an organization that can meet their long-term needs as well. We specialize in providing a high-level of service that grows with the tenant's company. We can offer great pricing and service because we buy properties way below market."

Brad Neiman, of locally based North Star Commercial Partners, who was not involved in the deal, tells GlobeSt.com that it is impossible to determine what the replacement cost of the building is because of its age. "But if you we're going to replace it in today's market, it would certainly cost you $200 to $300 per sf.," Neiman tells GlobeSt.com.

He also notes that with the influx of modern buildings, which offer larger floorplates at higher prices, there is a need for smaller, budget-driven users. "Having a building that serves small tenants on 17th Street [Denver's financial district] has to be a good thing in today's market. Especially if you only paid about $60 per sf," Neiman tells GlobeSt.com.