A sign for the Denver West Business Park in Lakewood. (Courtesy DPC Cos. via The Denver Post)
Editor’s note: A statement from DPC Cos. has been added to the end of this story.
Lakewood is now home to the region’s largest distressed office property.
The sprawling Denver West Business Park has defaulted on its loan, according to its lender, who wants a receiver appointed to oversee the property.
The campus consists of 20 two- to five-story buildings, ranging from 21,000 to 98,0000 square feet, that sit on 82 acres bisected by Interstate 70 in Lakewood. Together, the buildings have 1.34 million rentable square feet — about the same as downtown Denver’s Republic Plaza tower.
Denver West Business Park is owned by Denver-based DPC Cos., which announced in November 2018 that it had bought the property in partnership with Bridge Investment Group of Salt Lake City.
DPC and Bridge paid $144 million, public records show, and said at the time of the buy they expected to spend $16 million on improvements in the next three or four years. The complex was 78 percent occupied, the firms said.
The firms financed the deal with a $120 million loan from Cleveland-based KeyBank.
Last week, KeyBank sued the ownership group, saying the loan matured in mid-November 2023, five years after being issued. The loan entered default when the firms failed to pay it off by that date.
As of June 1, according to the lender, the owners still owed $99 million in principal, with interest accruing at $20,310 a day. KeyBank wants M. Shapiro Management Co., which is based outside Detroit, to serve as receiver.
DPC President and CEO Christopher King didn’t respond to requests for comment last week. Bridge also didn’t respond to a request for comment.
KeyBank, represented by Frost Brown Todd attorney, requested the receiver on June 18. Jefferson County District Court Judge Andrew Poland had yet to rule on the request as of Friday afternoon.
More than 15 major Denver-area office properties have defaulted on their loan since the pandemic, according to a list maintained by BusinessDen. Denver West Business Park is by far the largest in terms of acreage, and on par with towers on the list such as downtown’s Wells Fargo Center and Republic Plaza. The latter exited default last summer.
Receivership requests are typically perfunctory, because borrowers agree with their potential appointment when signing initial loan paperwork. But one local landlord did attempt to push back on a receivership request in court, albeit ultimately unsuccessfully.
DPC’s other holdings include the office building at 4601 DTC Blvd., which the firm purchased in March 2020.
Update (6/27): DPC Cos. CEO Chris King released the following statement to BusinessDen.
“It is unfortunate that the extreme capital market conditions have forced not only Denver West, but nearly all office buildings across the country into financial distress. Denver West is a great asset that has performed well and DPC has been a good steward for its tenant businesses and local community. The property is well leased, presents well, and is a leader in the west submarket.
The financial difficulty is a result of a November loan maturity and a frozen lending market that has been unable to provide new financing. The banks and the borrower partners have been working to find an extension solution, and we are hopeful to find a successful conclusion. We understand the bank’s need for a receiver and will continue to manage the property with a high level of service and cooperate with the Bank group to do what’s best for the property.”
Read more: Troubled towers: Breaking down Denver’s distressed office properties
A sign for the Denver West Business Park in Lakewood. (Courtesy DPC Cos. via The Denver Post)
Editor’s note: A statement from DPC Cos. has been added to the end of this story.
Lakewood is now home to the region’s largest distressed office property.
The sprawling Denver West Business Park has defaulted on its loan, according to its lender, who wants a receiver appointed to oversee the property.
The campus consists of 20 two- to five-story buildings, ranging from 21,000 to 98,0000 square feet, that sit on 82 acres bisected by Interstate 70 in Lakewood. Together, the buildings have 1.34 million rentable square feet — about the same as downtown Denver’s Republic Plaza tower.
Denver West Business Park is owned by Denver-based DPC Cos., which announced in November 2018 that it had bought the property in partnership with Bridge Investment Group of Salt Lake City.
DPC and Bridge paid $144 million, public records show, and said at the time of the buy they expected to spend $16 million on improvements in the next three or four years. The complex was 78 percent occupied, the firms said.
The firms financed the deal with a $120 million loan from Cleveland-based KeyBank.
Last week, KeyBank sued the ownership group, saying the loan matured in mid-November 2023, five years after being issued. The loan entered default when the firms failed to pay it off by that date.
As of June 1, according to the lender, the owners still owed $99 million in principal, with interest accruing at $20,310 a day. KeyBank wants M. Shapiro Management Co., which is based outside Detroit, to serve as receiver.
DPC President and CEO Christopher King didn’t respond to requests for comment last week. Bridge also didn’t respond to a request for comment.
KeyBank, represented by Frost Brown Todd attorney, requested the receiver on June 18. Jefferson County District Court Judge Andrew Poland had yet to rule on the request as of Friday afternoon.
More than 15 major Denver-area office properties have defaulted on their loan since the pandemic, according to a list maintained by BusinessDen. Denver West Business Park is by far the largest in terms of acreage, and on par with towers on the list such as downtown’s Wells Fargo Center and Republic Plaza. The latter exited default last summer.
Receivership requests are typically perfunctory, because borrowers agree with their potential appointment when signing initial loan paperwork. But one local landlord did attempt to push back on a receivership request in court, albeit ultimately unsuccessfully.
DPC’s other holdings include the office building at 4601 DTC Blvd., which the firm purchased in March 2020.
Update (6/27): DPC Cos. CEO Chris King released the following statement to BusinessDen.
“It is unfortunate that the extreme capital market conditions have forced not only Denver West, but nearly all office buildings across the country into financial distress. Denver West is a great asset that has performed well and DPC has been a good steward for its tenant businesses and local community. The property is well leased, presents well, and is a leader in the west submarket.
The financial difficulty is a result of a November loan maturity and a frozen lending market that has been unable to provide new financing. The banks and the borrower partners have been working to find an extension solution, and we are hopeful to find a successful conclusion. We understand the bank’s need for a receiver and will continue to manage the property with a high level of service and cooperate with the Bank group to do what’s best for the property.”
Read more: Troubled towers: Breaking down Denver’s distressed office properties
