A Tulsa, Okla., real estate investment company has acquired the remaining five buildings in the Prime Center office complex in the Briargate Business Campus for $18.7 million. It's a deal that one of the sellers says reflects how much the local commercial real estate market has improved in recent years.
GBR Properties Inc. bought buildings totaling 218,000 square feet at 2315-2355 Briargate Parkway on Wednesday from a joint venture of Boston-based The Davis Cos. and Colorado Springs-based Griffis/Blessing Inc.
The complex houses call centers and customer service operations for Wells Fargo & Co.'s mortgage unit, Zurich Insurance and UnitedHealth Group, and previously included a large call center operated by cell phone giant T-Mobile. The T-Mobile building was acquired for $11.2 million by a Phoenix commercial real estate investment firm in 2011.
"This was one of the first assets acquired at the bottom of the market in 2009 and now has sold for a much better price. The sale reflects how much the Colorado Springs market has improved since then. It also shows that our area is once again attracting outside investment capital," Griffis/Blessing President Steve Engel said Thursday.
A limited liability company created by Davis Cos. and Griffis/Blessing paid $16.9 million in mid-2009 for the $28 million mortgage on the property. At the time, the property was 26 percent vacant and was owned by a group of 33 investors put together by Chicago-based Orix Real Estate Capital Inc.
Davis and Griffis/Blessing negotiated with the 33 owners, who agreed in 2010 to turn the project over to them rather than face foreclosure of the mortgage. After taking over ownership, the Davis-Griffis/Blessing group hired Sierra Commercial Real Estate to market the property for them.
Sierra got T-Mobile, Wells and Zurich to renew their leases and signed Springs-based aerospace contractor Amergint Technologies and engineering giant URS Corp. as tenants, reducing the vacancy rate in the five buildings included in this week's sale by more than half to 17 percent.
"We bought it right and worked it hard," Engel said. "A lot of the credit should go to Sierra Commercial Real Estate, CQ which did a fine job of leasing this property in a tough market. They added a lot of value to this project."
Davis Cos. has invested in about 140 properties valued at $2.5 billion and has acquired commercial loans and other real estate securities valued at $550 million since 1976. The company and its affiliates own and manage real estate totaling about 10 million square feet.
Griffis/Blessing manages more than 4 million square feet of office, retail and industrial space and more than 5,500 apartment units valued at more than $600 million for numerous private and institutional owners through its Colorado Springs headquarters and an office in Denver.
GBR was started in 1987 and owns a variety of commercial real estate that include office buildings, shopping centers and vacant land in Arkansas, Colorado, Florida and Texas through a series of partnerships. The company acquired 9.5 acres of vacant land near Briargate Parkway and Voyager Drive that was to be the site of the Courtyards at Briargate office condominiums project. GBR acquired the $7.1 million mortgage on the land and foreclosed on the defaulted loan in 2008. The land is listed for sale by Sierra Commercial.
The complex that sold Wednesday was built between 1999 and 2002.
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