JV Buys 43-Story 1999 Broadway Building for $78M

DENVER-Broadreach Capital Partners, LLC and Transwestern Investment Co., LLC, in a joint venture with local investor Equity West Investment Partners, LLC, recently paid $77.65 million for the 642,000-sf, 43-story class A, 1999 Broadway building. The seller was Boston-based Winthrop Financial Associates.

“We are pleased to have acquired such high-quality class A office space in a recovering market like Downtown Denver where absorption has increased and vacancies have fallen meaningfully in the last 12 months,” says Nick Lyle, Broadreach Capital Partners director responsible for investment activity in Denver. “As the Downtown submarket continues to improve, we feel there is a great deal of upside as we lease-up the building over the next several quarters.”

“1999 Broadway has tremendous potential for value creation and is an exciting addition to our portfolio in the Denver metro area,” adds Matthew Haley, managing director of Transwestern Investment Co. “We plan on improving 1999 Broadway’s existing appeal to the market with a significant capital plan and improvements to the operations.”

Located two blocks from the center of Downtown, 17th and California streets, 1999 Broadway is the last high rise to have been constructed in the central business district. The building is about 84% leased.

The reflective, green-glass building was constructed around the Holy Ghost Church. It was designed by Denver architect Curt Fentress. The original developer was Lauder Development of London. Parking is serviced by 55 underground stalls and a nearby nine-story garage. The project is the only building in the CBD that benefits from a light-rail stop directly across the street servicing both north and southbound trains.

“1999 Broadway’s proximity to the expanding light-rail system provides great commuter access to the building and increases its appeal to a broad array of potential tenants,” Lyle adds.

David Naus, founder of locally based Equity West Investment Partners, who has invested in and operates more than 1.5 million sf in Denver, will represent ownership locally. Transwestern Commercial Services will provide day-to-day property management services, and Cushman & Wakefield will serve as the asset’s leasing agent.

Erik Osborn, developer of the planned 31-story, 184-unit One Lincoln Park, near 1999 Broadway, tells GlobeSt.com that he had several meeting with the new owners to see how they can work together. “I think they’re really going to help breathe life into the area,” Osborn tells GlobeSt.com. “And we think 1999 Broadway is just a gorgeous building.”

At one point in the 1990s, Winthrop provided a Rolls Royce for tenants. Stephen Quazzo, CEO of Chicago-based Transwestern, tells GlobeSt.com they may introduce a limo service, but not with a Rolls. Quazzo notes that he was involved in the sale of the building to Winthrop in the 1990s when he was with Goldman Sachs. The only major criticism of the building in real estate circles is that 1999 Broadway is not on 17th Street.

“Would I rather that at be at the Tabor Center site? Sure,” Quazzo tells GlobeSt.com. “But you go with the advantages that you have. We have unobstructed views of the Downtown skyline, LoDo, and the mountains, and we’re only a block off the center of Downtown. And Downtown is really moving toward us.”

Transwestern’s investment in 1999 Broadway is coming from its $800-million Aslan Realty Partners III, LLC fund. Quazzo noted that his company is looking for other investment opportunities in Denver. “We’re very high on Downtown,” Quazzo tells GlobeSt.com. “Most of our purchases in Denver during the past 10 years have been in the suburbs, not out of design, but because few properties were trading Downtown. We think that Downtown, if not a 24-hour city, is well on its way to be an 18-hour city.”

Winthrop had more than 300 investors in the building and had ties to New York City-based Apollo Real Estate Group, he said. Naus tells GlobeSt.com that in the mid-1990s, when he was with Chicago-based Equity Office Properties, headed by Sam Zell, he tried to buy the building. This time he was successful. “I think our timing is perfect,” Naus tells GlobeSt.com. “If we had bought it any earlier, it would have been premature.”