The office building at 9201 E. Dry Creek Circle in Centennial was once used by Arrow Electronics. (Google Earth)
A Centennial office building that’s just 25 years old has sold for less than a third of what it fetched five years ago and could be repurposed or demolished.
Arapahoe County-based Consolidated Investment Group purchased the vacant 9201 E. Dry Creek Road building last week for $12.25 million, according to public records.
That’s a 70 percent drop from 2019, when Florida-based asset manager Kawa Capital Management paid $40.1 million for it.
At the time, Arrow Electronics leased the building. Arrow moved out in May, and its lease expired at the end of June, according to spokesman John Hourigan. Arrow is still based in a building across the street.
The 9201 E. Dry Creek structure, built in 2001, is approximately 126,500 square feet. That means the latest deal works out to about $96 a square foot.
Consolidated Chief Operating Officer Dan Velazquez said Kawa put the building on the market around the time Arrow moved out.
His company believes the site would be a great spot for apartments and is considering two options. The first would be to convert the existing office building into apartments, and build another structure.
The second would be to demolish the office building and build entirely anew on the site.
“We’re not the first to try to convert an office building into apartments, but it’s not an easy feat,” Velazquez said.
In a Sept. 4 document, Consolidated wrote that, either way, it believes the site could eventually host between 325 and 450 apartments.
Consolidated submitted the document to the city in hopes of getting the property rezoned. That request still needs to be voted on by both Centennial’s Planning and Zoning Commission and City Council, according to Neil Marciniak, Centennial’s director of economic development.
Marciniak noted that office buildings along the I-25 corridor are selling at deep discounts, and that firms are exploring the potential for residential conversion. But he said it was still somewhat surprising to see the proposal for 9201 E. Dry Creek.
“This one was unexpected by the city given the age of the building,” Marciniak said.
Velazquez said it wasn’t feasible to wait for the results of the rezoning vote to purchase the building.
“It was important for the seller that this transaction closed by the end of the year … It was one of those things that gave us an edge,” he said.
The upcoming votes aren’t a sure thing, Velazquez said. But he said he believes Centennial “is pro-growth” and “ahead of the ball” in attempting to address the impacts of reduced demand for office space through rezonings that allow residential use in more areas.
“If it had not been for that, we’d have probably been much more cautious,” Velazquez said.
Consolidated is based a 2.5-mile drive away from the Dry Creek Road building, in unincorporated Arapahoe County. This is its first Denver-area office holding, and Velazquez said it hopefully won’t be the last.
And Consolidated is well-versed in real estate. The company says on its website it has “ownership interests through direct investment or joint venture partnerships” in more than 25,000 apartments around the country, in addition to other real estate holdings.
The office building at 9201 E. Dry Creek Circle in Centennial was once used by Arrow Electronics. (Google Earth)
A Centennial office building that’s just 25 years old has sold for less than a third of what it fetched five years ago and could be repurposed or demolished.
Arapahoe County-based Consolidated Investment Group purchased the vacant 9201 E. Dry Creek Road building last week for $12.25 million, according to public records.
That’s a 70 percent drop from 2019, when Florida-based asset manager Kawa Capital Management paid $40.1 million for it.
At the time, Arrow Electronics leased the building. Arrow moved out in May, and its lease expired at the end of June, according to spokesman John Hourigan. Arrow is still based in a building across the street.
The 9201 E. Dry Creek structure, built in 2001, is approximately 126,500 square feet. That means the latest deal works out to about $96 a square foot.
Consolidated Chief Operating Officer Dan Velazquez said Kawa put the building on the market around the time Arrow moved out.
His company believes the site would be a great spot for apartments and is considering two options. The first would be to convert the existing office building into apartments, and build another structure.
The second would be to demolish the office building and build entirely anew on the site.
“We’re not the first to try to convert an office building into apartments, but it’s not an easy feat,” Velazquez said.
In a Sept. 4 document, Consolidated wrote that, either way, it believes the site could eventually host between 325 and 450 apartments.
Consolidated submitted the document to the city in hopes of getting the property rezoned. That request still needs to be voted on by both Centennial’s Planning and Zoning Commission and City Council, according to Neil Marciniak, Centennial’s director of economic development.
Marciniak noted that office buildings along the I-25 corridor are selling at deep discounts, and that firms are exploring the potential for residential conversion. But he said it was still somewhat surprising to see the proposal for 9201 E. Dry Creek.
“This one was unexpected by the city given the age of the building,” Marciniak said.
Velazquez said it wasn’t feasible to wait for the results of the rezoning vote to purchase the building.
“It was important for the seller that this transaction closed by the end of the year … It was one of those things that gave us an edge,” he said.
The upcoming votes aren’t a sure thing, Velazquez said. But he said he believes Centennial “is pro-growth” and “ahead of the ball” in attempting to address the impacts of reduced demand for office space through rezonings that allow residential use in more areas.
“If it had not been for that, we’d have probably been much more cautious,” Velazquez said.
Consolidated is based a 2.5-mile drive away from the Dry Creek Road building, in unincorporated Arapahoe County. This is its first Denver-area office holding, and Velazquez said it hopefully won’t be the last.
And Consolidated is well-versed in real estate. The company says on its website it has “ownership interests through direct investment or joint venture partnerships” in more than 25,000 apartments around the country, in addition to other real estate holdings.
