Writer Square Sold as Part of $52M Portfolio

LAKEWOOD, CO–Alliance Commercial Partners, based here, paid about $52 million for a six-building, 565,497-sf portfolio that includes the well-known Writer Square mixed-use development at the edge of Lower Downtown.

Alliance also bought the class A Milestone Tower I at 5613 DTC Parkway in the Denver Tech Center, Greenwood Place in Greenwood Village, and three small office buildings in Boulder from Strawberry Holdings, headed by local investor Edmund Leo.

Leo bought the buildings between 1991 and 1997. Leo tells GlobeSt.com that his firm is an “extension” of Malaysia-based Selangor Properties of Berhad. His late father-in-law, who in 1996 was rated as the 92nd richest person in Asia, formerly headed Selangor.

Alliance bought the properties at far below replacement cost, local real estate brokers tell GlobeSt.com.

The overall purchase price was about $92 per sf, while Milestone, with all of its granite and marble, would cost at least $150 per sf to replace. And Writer Square, with its 170,534 sf in retail and office space, has one of the best locations Downtown, bordered by the 16th Street Mall on one side and Larimer Square on the other.

“The office building also has parking,” CB Richard Ellis investment broker Mary Sullivan tells GlobeSt.com. “You can’t underestimate the importance of parking Downtown.”

Sullivan, who was not involved in the deal, also tells GlobeSt.com that the Milestone I building is a premier building. “It was built in the early 1980s, when buildings were built with other people’s money, and no expense was spared,” Sullivan tells GlobeSt.com. Later, buildings didn’t have such high finishes with such top-end materials, she goes on to say. “The only thing that dates Milestone is the brass in the lobby, and that’s an easy fix,” she tells GlobeSt.com.

Rick Stone, a principal of Alliance Commercial, notes that the overall occupancy rate for the office buildings is 55%, although the Writer Square office tower is 75% leased.

This is not the first bargain-basement deal made by Alliance. This spring it paid $14 million for two class A buildings with a total of 350,000 sf that were built by Broomfield-based Level 3, but never occupied. The buildings sit on a 55-acre site.

Brokers estimate Level 3, a telecommunications giant, invested at least three times the dollar amount in the buildings than what Alliance paid for them.