Just days after breaking ground, Starwood Capital Group and a local developer have sold their latest office project in Denver to Invesco Real Estate for an undisclosed price.
Starwood and Denver-based East West Partners had plans to construct 16 Chestnut (pictured), a 430,000 square foot office building. The partners bought the development site in Denver’s growing Union Station neighborhood in July 2014 for $10 million from Denver’s public transit system, according to real estate data provider Real Capital Analytics. Since then, the groups worked to develop a plan for the 19-story office tower, starting construction last week.
Invesco bought both the land and the construction rights, according to the statement. Spokespeople for Starwood and Invesco declined to comment and the terms of the deal were not disclosed, but local media reported that the project was valued at $190 million. The building is 81 percent leased, with medical company DaVita Healthcare Partners set to anchor the space. East West will continue developing the project, according to a statement from the firms.
Starwood has bet on the Denver submarket of Union Station through multiple purchases out of its eighth opportunistic fund, Starwood Global Opportunity Fund VIII, according to the firm’s website. Investors in the vehicle, which closed in April 2010 on $1.8 billion, included the Teachers’ Retirement System of Louisiana, which allocated $75 million and the Pennsylvania State Employees’ Retirement System, which committed $50 million, according to PERE research.
The first office building that the firm developed, One Union Station, sold for $67 million in June 2014. Starwood also recently completed construction on a neighboring property called the Triangle Building for $85 million, according to local media reports. That building is anchored by co-working company WeWork and telecommunications firm Liberty Global.
“We have great faith that Invesco and East West Partners will deliver an amazing project at 16 Chestnut,” said Dan Schwaegler, Starwood’s senior vice president in the asset management group, in a statement Tuesday. “Starwood Capital will continue to invest in Denver and the Union Station neighborhood through our involvement in the Triangle Building, as well as various other assets in the area, and we look forward to watching the city's continued emergence as one of the most dynamic metropolitan areas in the United States.”
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