X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

GREENWOOD VILLAGE, CO-Although the sale price isn’t being disclosed, industry observers believe that locally based Miller Global Properties paid about $40 million for the class A One DTC building at 5251 DTC Parkway in the Denver Tech Center. That would equate to a little more than $170 per sf for the 15-story, 226,609-sf building. But given the quality of the building, it likely would cost $250 or more per sf to replace it, Mike Winn, an investment broker with Cushman & Wakefield, tells GlobeSt.com. That would equate to a value of about $56.625 million.

Denver-based Corum Real Estate Group constructed the building in 1984. It was at a time when lavish buildings were being constructed in anticipation that oil exceeding $65 a barrel, the levels it is now only starting to approach. Instead, oil fell below $10 a barrel at its low, leaving behind not only millions of square feet of empty buildings, but a philosophy to build nice, efficient buildings in the future and not ones clad in granite and other luxurious finishes, such as found at One DTC.

“We may never see another building of this quality built again in Denver during our lifetime,” says Winn, who represented the seller, New York City-based C.V. Starr & Co. with fellow Cushman & Wakefield broker Tim Richey. C.V. Starr is the private investment vehicle for top executives in the company. Starr owned about five buildings in the metro area, but Miller Global only wanted One DTC, the crown jewel of its local holdings.

The building wasn’t on the market, but Peter Savoie, who left Cushman earlier this year to join Miller Global, called the owners to see if they would be willing to sell. “This is Peter’s deal,” Jim Miller, a principal of Miller Global, tells GlobeSt.com. Miller Global is headed by Jim, and his father, Myron Miller.

The building is 98% leased in a market that is about 20% vacant. “When we took people through the building, they couldn’t believe it was 20 years old,” says Mike Komppa, president of Corum. Corum has been headquartered in the building since it opened, although it sold its stake in the building years ago.

“I wish we were still an owner,” Komppa tells GlobeSt.com. “But if we couldn’t own it, I couldn’t imagine a better owner than Miller Global. [Myron] Miller is about as smart as it gets.”

Miller Global Properties LLC is a partnership between Miller Properties Group and Global Holdings Inc. The two have been real estate partners since 1995, developing, acquiring, operating and owning more than 65 office buildings and hotels in 18 cities in the US and Europe. These holdings comprise more than 8.25 million sf of office space and 1,500 hotel rooms with a value north of $2 billion. With the purchase, Vector Property Services LLC, the property arm of Miller Global, will manage the building.

The building was the first acquisition by the newly created Miller Global Fund V, which has $290 million in equity from Miller Global and pension funds from Qwest Communications, SBC, DuPont, the Colorado Public Employees’ Retirement Association and San Joaquin County, CA. The money can be leveraged to buy about $1 billion in properties, Jim Miller says. He tells GlobeSt.com that he has three years to invest the money, but he expects to deploy it within a year. They’re aiming to get a 15% to 20% internal rate of return from the properties, which they would expect to hold for about seven years. But if they were to receive an offer that was too good to pass up, they would sell the property, he says.

Miller tells GlobeSt.com that he expects future purchases, both in Colorado and outside, will be class A properties. “That’s been our bread and butter,” he tells GlobeSt.com.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.