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12/08/22
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Crescent Real Estate LLC has collected a total of $180 mil from the strategic disposition of a 1.02 msf, Class A office portfolio in Colorado Springs, CO to multiple buyers over the past four years. The portfolio comprises 13 buildings that were sold as either individual buildings or micro-portfolios.
10807 New Allegiance Dr, Colorado Springs, CO |
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Crescent had originally acquired the portfolio of mid-rise and single-story office buildings in 2018 for approximately $125 mil. Crescent then began divesting the assets beginning in 2019 through 2022. The final sale in the portfolio, Epic One, recently closed in late October 2022.
When Crescent first acquired the entire 13-building portfolio it was 77% leased. During their ownership they elevated the portfolio to 89% leased overall and were also able to see an 11% rental rate increase collectively. Additionally, achievable lease rates at the end of the hold period were nearly 40% higher than lease rates upon acquisition for the very best-in-class Class A product in the portfolio.
The portfolio is strategically located across different business parks within the desirable North and Southeast / Airport submarkets and includes the best-in-class assets within their submarkets. The 13 properties include:
Building Name -- Address -- Size
Epic One -- 10807 New Allegiance Dr -- 145.7k sf
InterQuest I -- 9945 Federal Dr -- 74k sf
InterQuest II -- 9925 Federal Dr -- 54.1k sf
InterQuest III -- 9950 Federal Dr -- 66.2k sf
InterQuest IV -- 9960 Federal Dr -- 46.9k sf
Patriot Park I -- 985 Space Center Dr -- 103.2k sf
Patriot Park II -- 980 Technology Ct -- 33.2k sf
Patriot Park V -- 745 Space Center Dr -- 51.8k sf
Patriot Park VI -- 655 Space Center Dr -- 104k sf
Patriot Park VII -- 565 Space Center Dr -- 89.6k sf
1055 Newport -- 1055 North Newport Rd -- 59.8k sf
Newport Centre One -- 1670 North Newport Rd -- 67.6k sf
Northrop Grumman -- 3535 Northrop Grumman Point -- 124.3k sf
Totals -- 1.02 msf
The properties all feature convenient access to major north/south thoroughfares including Interstate 25, among other state highways. Additionally, all are in close proximity to numerous restaurant and retail amenities as well as extensive executive and employee housing.
Cushman & Wakefield’s Aaron Johnson and Jon Hendrickson represented Crescent Real Estate LLC in the disposition of the entire portfolio. A team from Cushman & Wakefield also repped the seller in Crescent’s 2018 purchase transaction.
“This portfolio comprises some of the most prestigious properties in the region and that are all well-positioned in a constrained Class A market with minimal new construction and limited competition,” said Johnson. “Colorado Springs is recognized as one of the most desired locations in the U.S. for aerospace and engineering and tech users and has proven resilient with solid fundamentals driven by increased leasing and activity. While still facing challenges like any other market, Colorado Springs is expected to continue its path of healthy recovery.”
The second largest city in the state and 45 miles south of Denver, Colorado Springs’ economy is highly diversified with a mix of government and private employers with a special niche to the homeland/satellite defense sectors—it is the second-largest aerospace economy in the U.S.—as well as a growing sports-based economy.
“The access to the Colorado Front Range, proximity to Denver, low cost of business operation and educated workforce are all contributing factors to this high-growth market, which according to experts El Paso County (Colorado Springs) is projected to become bigger than the City and County of Denver by 2050,” added Johnson.
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