Developer John Madden has sold the bulk of his remaining holdings in the Denver Tech Center, closing a deal in the works for years that for a time appeared to have been scuttled by the pandemic.
Seattle-based Schnitzer West purchased the 15-story Palazzo Verdi building at 6363 Fiddlers Green Circle and the six-story Fiddler’s Green I and II buildings at 6399 and 6501 S. Fiddlers Green Circle on Friday, according to Doug Zabel, the firm’s top Denver executive.
Palazzo Verdi sold for $72.5 million, according to public records. The building is about 320,000 square feet, according to the seller’s website, making the deal worth about $230 a square foot.
The two smaller office buildings each sold for $43 million, records show.
Zabel said the company also purchased adjacent land that could be developed in the future. No deed detailing the price of that component of the deal had been recorded by Arapahoe County as of press time.
The deal was long in the works. Schnitzer West said in a 2018 news release that it had formed a joint venture with the John Madden Co. to own and manage the three buildings. In January 2020, Zabel told the Denver Business Journal that his firm was set to acquire them.
Two months later, however, the coronavirus pandemic hit in earnest.
“We were working with John to purchase these assets prior to the COVID pandemic, and in March of 2020 our deal fell apart,” Zabel said.
Zabel said Schnitzer West went back under contract to buy them around March 2021, a year later.
“They’re of the highest quality in the southeast market, and check all the boxes in terms of transit-oriented development and high rent rolls,” Zabel said.
Zabel said the development sites are generally appropriate for office or hospitality use, and Schnitzer West is more likely to pursue the former.
“We’re office developers,” he said. “That’s what our bread and butter is.”
The company has done some preliminary work on massing, but is unlikely to submit development plans for approval in 2022, Zabel said.
Schnitzer West has had a notable year locally. In September, the firm sold its Civica building in Cherry Creek for $108 million, setting a price-per-square-foot record for Denver. The company also broke ground on its 12-story The Current building in RiNo in the spring, ahead of other projects that were paused in the wake of the pandemic.
Zabel said Schnitzer West will break ground on an approximately 200,000-square-foot office building in downtown Westminster next year.
Madden, meanwhile, moved to Colorado in the 1960s, having decided to go into real estate after nixing plans to attend law school. Although he also developed in other markets, including San Jose and Detroit, much of his company’s projects can be found in Greenwood Village and the Denver Tech Center. In July, Madden told BusinessDen his favorite local project is Tuscany Plaza, located across the street from Palazzo Verdi.
“John’s developed a really great legacy down there, and we’re looking forward to continuing that,” Zabel said.
A Madden executive didn’t respond to a request for comment on last week’s sale.
The sale leaves Madden owning just one of the DTC buildings he developed, at 5700 S. Quebec St. It features three floors of office space, topped with a residential penthouse largely hidden from view where Madden spends part of the year.
The penthouse hit the market in July, with an asking price of $6.7 million. Phil Ruschmeyer of Ruschmeyer Corp., who is among the team marketing the unit, declined to comment when reached on Wednesday.