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DENVER-Westcore Properties LLC of San Diego has closed on the first of two major portfolios it has had under contract, paying New Jersey-based Mack-Cali Realty Corp. $194.3 million for a 19-building, 1.4-million-sf portfolio of class A and B office buildings in Colorado, mostly in the Denver area. The acquisition was made in partnership with Dubai Investment Group. As part of the deal, Westcore hired the seven-person Mack-Cali team that managed the properties and assumed Westcore’s Denver office lease.

The portfolio of office and office-flex buildings is 94% occupied and comes with 7.1 acres of vacant, developable land and another 1.6 acres dedicated to a parking facility. Westcore expects to benefit from increasing rental rates in the recovering market, according to company CEO Donald Ankeny, who spoke with GlobeSt.com late last week, when the company closed on its $352-million sale of its 44-building Silicon Valley portfolio.

Five weeks from now, Westcore is scheduled to close on the acquisition of another Mack-Cali portfolio. Earlier this year, Westcore agreed to acquire for $126 million two mid-rise office buildings in Downtown San Francisco totaling 455,000 sf. The buildings, 760 Market St. and 795 Folsom St., are about 85% occupied. The sale is scheduled to close on Dec. 22.

The combined cost of the two acquisitions is about $320 million. Over the next 12 months, Ankeny projects that Westcore will acquire at least another $430 million in assets in Southern and Northern California, Phoenix, Las Vegas, the Pacific Northwest and the Greater Denver region. The acquisitions will include large, institutional-grade portfolios as well as single core-plus and value-add assets, he says.

The Colorado portfolio acquisition marks Westcore’s largest acquisition to date and its entry into the Colorado office market “Denver is interesting in that rents for flex-office space are very close to more conventional office product,” Ankeny told GlobeSt.com.

The Colorado portfolio consists of 16 Denver-area buildings, three buildings in Colorado Springs and the aforementioned developable land, which is located in Littleton. Developed between 1981 and 2001, the portfolio is leased to 135 tenants and is currently 95% leased.

Mack-Cali president and CEO Mitchell Hersh says the sale of the portfolio to Westcore is “a significant step” in the REIT’s plan to exiting its non-core Western markets and focus on its 301-building, 34-million-sf portfolio in the Northeast. “With the sale of our remaining San Francisco properties expected to close later this quarter, our exit of the Western markets will be complete,” he says.

Here’s a breakdown of the properties in the Colorado portfolio:

  • URS Center, 8181 E. Tufts, Denver–a 185,256-sf building on 2.9 acres. URS Engineering is a major tenant.
  • 5975 S. Quebec, Centennial, CO–a 103,236-sf building on 4.6 acres. KB Homes is a major tenant. Westcore Properties’ new Denver office is located here.
  • 400 Inverness, Englewood, CO–a 111,482-sf building on 5.9 acres. Major tenant is Cochlear Americas.
  • Centennial Valley II, 285 Century, Louisville, CO–a 69,145-sf building on 4.9 acres. Major tenant is McKesson.
  • Plaza at One Union Square, 141 Union, Lakewood, CO–a 63,600-sf building on two acres. Major tenant is Arbitration Forums.
  • Pyramid Pointe, 9777 Mt. Pyramid, Meridian, CO–a 119,950-sf building on 8.9 acres. Major tenant is State Farm Mutual.
  • 5350 S. Roslyn, Greenwood Village, CO–a 63,754-sf building on three acres. Major tenant is RE/MAX.
  • 384 Inverness Dr. South, Englewood, CO–a 51,527-sf building on 2.9 acres. Major tenant is Quickpen.
  • Wells Fargo Bank Building, 400 S. Colorado, Glendale, CO–a 125,253-sf building on 5.4 acres. Major tenant is Wells Fargo.
  • 105 S. Technology, Broomfield, CO–a 37,574-sf building on 3.4 acres. Major tenant is Pharmaceutical Buyers Inc.
  • Interlocken I-A and I-B, 303 S. Technology, Broomfield, CO–two buildings totaling 74,870 sf on 7.4 acres. Major tenant is Sirenza.
  • Centennial Valley I-A and I-B, 248 Centennial and 1172 Century, Louisville, CO–two buildings totaling 88,832 sf on 7.7 acres. Major tenant is Rock Bottom Restaurants.
  • 67 Inverness, Englewood, CO–a 54,280-sf building on 4.6 acres. Major tenant is MP Totalcare.
  • Highland Park – 9359 E. Nichols, Englewood, CO–a 72,610-sf building on 5.9 acres. Major tenant is First Tennessee Bank.
  • Corporate Point at Briargate, 1975 Research, Colorado Springs–a 115,260-sf office building on 7.9 acres. Major tenant is Pulte Homes.
  • Tech Center at Briargate, 2375 Telstar and 8415 Explorer, Colorado Springs–two office/flex buildings totaling 95,392 sf on 8.7 acres. Major tenant is Harris Corp.
  • Hilltop Business Center–7.1 acres of vacant land in Littleton, CO.
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