L&J Schmier Enters Market with $30M Purchase

ParkRidge Six is 100% leased to Aurora Loan Services Inc., a subsidiary of Lehman Brothers. The building was previously leased to American Century Services Corp., which had about a dozen years left on its 15-year lease.

"We are very excited about our first acquisition in the Denver market," says Jeffrey L. Schmier, president of the company. "As a holder of more than four million sf nationally, the Denver market is intriguing and we will be seeking additional opportunities through our relationship with Crimson Financial."

Crimson Financial exclusively represented the seller, ParkRidge Six LLC, a partnership of the Patrinely Group LLC and its partner, Apollo Real Estate Advisors LP. Patrinely designed and constructed the five-story building in 2001 as a build-to-suit for American Century, a mutual fund company based in Kansas City, MO. But as the stock market soured, American Century no longer needed the space.

But the deal worked out for Patrinely, when Aurora Loan stepped in. "This is the conclusion of a very successful development for (the) Patrinely Group," says Dean Patrinely, managing principal.

Because of the building's quality and high visibility, and its long-term lease with Aurora Loan, there was a lot of interest in the building, despite the soft local economy. "We found significant interest from both institutional and private investors due to the long-term credit lease currently in place for this single-tenant building," says Rick Egitto, senior managing director of Crimson's western region. "The premier southeast Denver location and high quality finishes provided Schmier the opportunity to enter the Colorado market to expand its national portfolio," he says.

He went on to tell GlobeSt.com that the building, which sold for about $183 per sf, would have sold for a higher price, but American Century had an option in its 15-year lease to give back some of its space in the seventh year of the contract. "But that sort of all played out when Aurora Loan Service came in and took over the entire building," he tells GlobeSt.com. Still, the buyer paid less than the replacement cost of about $210 per sf, he says.

Egitto has known the buyer, Schmier, for a number of years. "When I was with Trammell Crow, I had done some deals for him," Egitto tells GlobeSt.com. "Jeff had been looking at the Denver market for a number of years, but had decided it was too pricey until recently."Egitto went on to tell GlobeSt.com that ParkRidge Six will serve as Schmier's core holding, as he begins to look for various types of commercial real estate in the metro area, starting next year. "His m.o. is to buy an income producing property with a long-term lease to get off the ground, and then he begins to look at different investments," Egitto tells GlobeSt.com. "He would look at value-added properties, even retail and industrial."

The deal also marks the first "real big transaction" since Crimson Financial was formed soon after the terrorist attacks on Sept. 11, 2001, Egitto explained to GlobeSt.com.