City Office REIT Inc. recently announced it has entered into an agreement to acquire Plaza 25 in Denver for a purchase price of $25.1 million. As major conditions to the acquisition have been satisfied, the transaction is expected to close in early June 2014.
Located in the Greenwood Plaza submarket of Denver, Plaza 25 is an office park featuring two three-story office buildings and one four-story office building. The combined structures offer 197,000 rentable square feet.
“We believe Plaza 25 represents an ideal first acquisition for City Office REIT. It is located in Greenwood Village, one of Denver’s top submarkets with proximity to executive housing, a strong educated employee base and an abundance of transportation networks including a light-rail station,” says James Farrar, CEO of City Office REIT.
Built in 1981, Plaza 25 was completely renovated in 2006. The property is flanked by the city’s Southeast Light Rail line and is within walking distance of the Arapahoe Station. Plaza 25 is currently 93 percent occupied and, based on the purchase price, is expected to generate an initial full-year cash net operating income yield of around 8.1 percent.
“The property is situated with Interstate 25 frontage and benefits from Greenwood Village’s numerous amenities,” Farrar says. “With its below market in-place rents and stable tenant base, we believe that Plaza 25 will continue to benefit from Denver’s strengthening leasing conditions and deliver our investors increasing cash flow. City Office REIT continues to review a strong pipeline of acquisition opportunities within our target markets and we remain focused on growing our portfolio and enhancing stockholder value.”
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