CBRE Completes Sale-Partial Leaseback of Verizon Regional Operations Center in Colorado Springs
Colorado Springs, CO – CBRE Group, Inc. recently announced the sale and partial leaseback of the Verizon Regional Operations Center located at 2424 Garden of the Gods Road in northwest Colorado Springs. Mike Winn, Tim Richey and Chad Flynn of CBRE Capital Markets, Institutional Properties, in Denver; along with Matt Hargrove and Mike Shellow of CBRE Advisory & Transaction Services | Occupier in Los Angeles; and D.J. Decker of CBRE Global Workplace Solutions in Dallas advised the seller, Verizon Business Network Services, Inc. of Basking Ridge, New Jersey. A private commercial real estate investment group purchased the property in a sale that closed Aug. 10, 2016.
Verizon will remain the largest tenant within the approximately 700,000-square-foot office campus. The Colorado Springs transaction is Verizon’s third corporate-campus monetization in the last 18 months, part of a three-property national portfolio that included earlier sale-leasebacks in Richardson, Texas, in July 2015 and Ashburn, Virginia, in December 2015.
“Although a complex transaction, the monetization of Verizon’s Colorado Springs corporate campus presented a true win-win opportunity for the buyer and seller,” said Mr. Flynn, vice president, CBRE Capital Markets, Institutional Properties. “The sale was well aligned with Verizon’s strategy to free up capital while maintaining its operations. In hand, an institutional investor received rare access to one of the highest-quality office facilities in the market at a significant discount to replacement cost with reliable cash flow and considerable upside potential through lease-up.”
The Colorado Springs Verizon campus was selected for monetization in part because of the region’s appeal to institutional investors.
“We are seeing more and more institutional owners targeting Colorado Springs and the entire Front Range for strategic investment opportunities, drawn in by our region’s outstanding quality of life, strong business climate and top-ranking talent pool,” said Mr. Winn, vice chairman, CBRE Capital Markets, Institutional Properties.
Constructed between 1984 and 1994, 2424 Garden of the Gods has been institutionally owned and maintained since its development. It was originally a build-to-suit project for IBM, later transitioning to a corporate campus for MCI and, upon MCI’s acquisition, Verizon. Today the facility serves as a multi-tenant office campus for some of the region’s largest employers, including Verizon, Xerox and PGi. Verizon’s operations on the property span new product development, corporate services, wireless services and Verizon wireline services. The campus contains six interconnected, two, three and four-story buildings on approximately 125 acres.
“Although initially conceived as a corporate headquarters, 2424 Garden of the Gods’ unique design has evolved to become one of the region’s premier multi-tenant properties,” said Mr. Decker of CBRE Global Workplace Solutions. “From the large floor plates, full-service cafeteria and 120-seat auditorium to the mountain views, unique park-like setting and generous parking supply, the campus offers a level of amenities appealing to even the most discerning corporate office users.”
The buildings’ floor plates range from approximately 20,000 to 80,000 square feet and permit a balance of interior workspace and perimeter offices and conference rooms. The design is conducive to full-floor users and also easily demised into multi-tenanted floors. The property was approximately 84 percent leased at the time of sale. Greg Phaneuf and Peter Scoville of Colorado Springs Commercial were part of the sales team and will handle leasing for the new owner.
Images courtesy of CBRE