The city’s prosecutors are getting a hell of a view.
A lease obtained by BusinessDen through a public records request confirms that the Denver District Attorney’s office will move into the 52nd through 54th floors of Republic Plaza, a detail the Hancock administration previously declined to disclose.
Republic Plaza is Denver’s tallest building at 56 stories. The few tenants that will be above the DA’s office include Merrill Lynch and architecture firm Page Southerland Page.
The Denver City Council approved the lease for 73,924 square feet this month, and the DA’s Office is expected to move into the building in January. Prosecutors and support staff currently work from the Wellington E. Webb Municipal Office Building at 201 W. Colfax Ave.
The lease breaks down the specifics behind the 13.5-year, max $49.92 million deal and provides an insight into rates at one of the city’s marquee office towers. While landlords often advertise a desired rent when trying to lure tenants, the specific terms the parties then negotiate are rarely made public.
The lease also comes at a tumultuous time for Republic Plaza which, like many of the country’s older office buildings, is seeing some tenants leave or attempting to downsize. The $243 million loan backed by the building is in special servicing after owner Brookfield failed to pay it off as required last year. Trepp, a firm that tracks commercial real estate loans, told its clients on April 18 that the 56-story Republic Plaza is now valued at $298 million, down from $535 million in 2012.
The city will pay nothing for its first year, a standard incentive on long-term leases, the contract shows. Denver will then pay an annual base rent of $24 per square foot, or $148,000 monthly, starting in the second year. That figure will increase 2.5 percent annually, so the city is paying $31.49 in the 13th year.
The city will also be responsible for a proportionate share of the landlord’s building operating costs and real estate taxes starting in the second year. That is expected to add an additional $16.46 per square foot annually, amounting to about $101,000 a month. That figure could increase up to 10 percent annually without requiring a lease amendment, although a chart in the lease assumes an annual increase of 5 percent.
If the DA’s office wants more space, Denver has the option to take about 11,000 square feet on the 49th floor for the same terms within the first 18 months. The city also has a right of first offer on space within the 51st and 55th floors.
The landlord Brookfield was represented in lease negotiations by Cushman & Wakefield. The city was represented by Tim Harrington, Sam Depizzol, Alan Polacsek, Edward Kane, Morgan Sturgeon and Jerie Owens of Newmark.
A separate contract with Newmark, also obtained through a public records request, states that the city would pay the firm a max of $450,000 to provide real estate brokerage services as needed for a one-year period starting this past January.