Crescent Real Estate Completes Sale of 1 MSF Office Portfolio in Colorado Springs for $180M
Centennial-based Crescent Real Estate LLC has sold its premier Class A office portfolio in Colorado Springs. Totaling 1.02 million square feet, the monumental portfolio comprises 13 buildings that were sold as either individual buildings or micro-portfolios to multiple buyers during the past four years for an aggregate price of approximately $180 million.
Cushman & Wakefield represented Crescent Real Estate LLC in the disposition of the entire portfolio.
Crescent Real Estate LLC had originally acquired the portfolio of mid-rise and single-story office buildings in 2018 for approximately $125 million — a team from Cushman & Wakefield represented the seller in that transaction. 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.
“Crescent had the incredible foresight to acquire these assets in 2018 prior to Colorado Springs’ robust growth and ascent as one of the highest growth markets in the country. The company made a substantial bet in acquiring 12% of the local market’s total Class A/B office inventory, and that confidence paid off,” said Managing Director Aaron Johnson of Cushman & Wakefield.
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.
“Crescent contrived a highly strategic exit plan for each property and did a masterful job in successfully executing on that plan the past four years,” added Johnson.
Characterized by its historical institutional ownership, the high-quality portfolio has a history of high tenant retention. The tenants in the portfolio span a wide range of key industry sectors including Aerospace/Engineering, Government and Military/Defense Contractors, Technology and Healthcare.
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:
|Epic One||10807 New Allegiance Dr||145,694 sf|
|InterQuest I||9945 Federal Dr||74,005 sf|
|InterQuest II||9925 Federal Dr||54,057 sf|
|InterQuest III||9950 Federal Dr||66,223 sf|
|InterQuest IV||9960 Federal Dr||46,948 sf|
|Patriot Park I||985 Space Center Dr||103,183 sf|
|Patriot Park II||980 Technology Ct||33,190 sf|
|Patriot Park V||745 Space Center Dr||51,770 sf|
|Patriot Park VI||655 Space Center Dr||103,970 sf|
|Patriot Park VII||565 Space Center Dr||89,624 sf|
|1055 Newport||1055 North Newport Rd||59,763 sf|
|Newport Centre One||1670 North Newport Rd||67,640 sf|
|Northrop Grumman||3535 Northrop Grumman Point||124,305 sf|
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.
“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 Aaron 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.”