61 Inverness is a newly renovated, 87,199 square foot quality office property in the heart of Denver’s exceptional Inverness Business Park. This asset is 98% leased to a strong tenant base with great credit, has recently been experiencing great leasing activity and will offer an investor a leveraged IRR of over 16%.
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61 Inverness is being offered for sale. All prospective buyers are encouraged to present their best offer based on the “as-is, where–is” condition of the property. In addition to this offering memorandum, detailed financial analysis is available upon request.
- Premier Inverness Business Park Location
61 Inverness is ideally located in the covenant controlled Inverness Business Park. The state of the art, 980 acre, master-planned Inverness Business Park is one of the most vibrant and attractive office parks in Colorado. The Inverness/Panorama micro market consists of approximately 6.6M SF of office space in 77 buildings and is among the strongest locations in the SES submarket. 61 Inverness is very attractive to office tenants as it offers direct access to both the Dry Creek/County Line light rail stations and is surrounded by Denver’s largest executive housing base.
- Deep Credit In-Place Tenancy
Due to the asset’s recently repositioned interior finishes and above market parking ratio, 61 Inverness caters to image conscience credit tenants. It’s rare to find assets under 150,000 SF that have the nature of credit, and the long term commitment of the tenants that 61 Inverness enjoys. Jeppesen occupies 40,043 SF and has been a tenant at 61 Inverness for twelve years. During that time,they have renewed and expanded their lease twice, showing a long term commitment to the property Jeppesen’s global headquarters is adjacent to 61 Inverness and is at capacity. 61 Inverness has served as a much needed auxiliary office and parking for over 12 years. Another credit tenants is Computer and Communication Technologies (CCT). CCT has occupied 6,704 SF since January of 2007 and recently expanded into another 5,432 SF.
Additionally, Centura Health, one of the state’s top 25 employers, recently leased 8,141 square feet and is a testament to the assets quality of improvements and locational attributes. This recent leasing activity demonstrates strength in the tenancy and desirability of the asset to the market. 61 Inverness’s long term occupancy history by credit tenants demonstrates the quality of the improvements, locational attributes, and the long term cash flow it offers to investors.
- Exceptional Capital Condition & Recently Renovated Lobby and Common Areas
61 Inverness has recently undergone extensive interior renovations and capital improvements totaling $867,000 ($10 PSF). These recent upgrades ensure limited future capital improvements and a more consistent bottom line cash flow. United Properties purchased 61 Inverness at a time of neglect by two previous ownerships. The current ownership implemented a major capital improvement program which included a new lobby, all new common areas, new lighting and ceiling grids, new parking lots, window sealing, and new HVAC units. Due to the capital nature of the asset, 61 Inverness has significantly stronger credit tenancy than the other properties in its competitive set. The professional nature of the asset’s operation, as well as the recent capital improvements, will lower future ownerships’ costs and allow 61 Inverness to attract, and retain, the very best tenants in the market.
- High Quality Asset in Rising Rent Environment / Discount to Replacement Cost
61 Inverness will trade at a significant discount to replacement cost. New projects currently under construction must contend with higher land prices and quickly escalating construction costs. Moreover, there is less than 45
acres left for development in the Inverness Business Park, and the cost to replace the building would exceed $265-$280 per square foot. At a listing price of $12,100,000 or $138.76 per square foot, the property will trade at nearly
50% of replacement cost.
The asset exit price psf is also supportable in recent sales comps providing a realistic and appealing exit strategy. Both the lack of Class A space and the lack of new construction in the SES submarket is applying dramatic upward pressure on rental rates. Over the course of the past year, rent growth for SES Class B Office space has been 13.00%. The purchaser of 61 Inverness will be able to take advantage of the rising Class B rents of the Southeast Suburban Market. 61 Inverness is in exceptional capital condition and will trade at a significant discount to replacement, offering the new ownership a competitive basis in a best of class asset.
- Substantial Upside Potential Due to Below Market Rents
In place rental rates at 61 Inverness are $18.73 per square foot, almost $2.00 below market rental rates. The asset is currently 98% occupied, but with more than 25% roll in the first three years, there is a tremendous opportunity to add value by rolling expiring leases to market lease rates.
Given the southeast suburban market’s rapidly declining vacancy, and rising rental rates, 61 Inverness is well positioned for increased income in the short term, and has enduring, stable cash flows for the holding period.
The Inverness/Panorama micro market consists of approximately 6.6M SF of office space in 77 buildings and is among the strongest locations in the SES submarket. 61 Inverness is very attractive to office tenants as it offers direct access to both the Dry Creek/County Line light rail stations and is surrounded by Denver’s largest executive housing base.