Maryland-based Corporate Office Properties Trust, a real estate investment firm, has put its entire Colorado Springs market portfolio up for sale.
That’s 16 buildings and more than 1.1 million square feet of mostly Class-A office space.
The publicly traded firm’s Colorado Springs holdings account for more than 10 percent of the 9.3 million square feet of class-A office space in the city.
Michael Winn and Timothy Richey at Cushman & Wakefield in Denver are partnering with Peter Scoville at Cushman & Wakefield Colorado Springs Commercial to represent the portfolio of properties.
Scoville deferred to COPT for comment on the listing.
John Norjen, vice president of investments for COPT, said he couldn’t comment on the sale or explain why the REIT is leaving the Colorado Springs market. Because the company is publicly traded, it’s carefully monitored by the Securities Exchange Commission and executives aren’t permitted to comment.
The Colorado Springs properties do have significantly higher vacancy than the company’s holdings in other areas, according to COPT’s quarterly filing in October. Colorado Springs had a 76.5 percent occupancy rate, while most of COPT’s other properties, primarily clustered in the Washington, D.C., area had occupancy rates in the high 80-percent range all the way up to 100 percent.
The company developed a Strategic Reallocation Plan in 2011, according to the filing, and it had aggregate losses of 9.7 million and could attribute $6.9 million of that to Colorado Springs properties and $5.1 million to a single property in Colorado Springs.
“Approximately $5.1 million of these losses related to our disposition of an additional property from which the cash flows were not sufficient to recover its carrying value.”
In addition to several others, the company owns two single-story office buildings on 132 acres near Interstate 25 and Interquest Parkway known as Hybrid I and Hybrid II. The properties have remained largely vacant with continued listings for available space on public listing sites like Loopnet since construction in 2006.
COPT had identified the 132-acre parcel as a growth opportunity in 2008, when then CEO Randall Griffin told the CSBJ he could envision the area becoming a mixed-use office and retail development like Denver’s tech center.
COPT came into the Colorado Springs market in 2005 when it purchased 64 acres of land near Powers Boulevard and East Platte Avenue for $10 million. After that, the company proceeded to buy roughly $230 million worth of property in Colorado Springs by 2008 estimates.
Following its first purchase, COPT bought 136,000 square feet of office space at Science Park I & II near the north entrance to Patriot Park for $18 million and the 67,500-square-foot Newport Centre One building at 1670 N. Newport Road for $9 million.
COPT then purchased a 50-percent interest with Nor’wood Development Group owner David Jenkins in the 132-acre land parcel south of Interquest Parkway near Interstate 25 for $9.2 million and later purchased full control of the tract for $25 million, according to previous CSBJ reports.
The company was also named master developer for a 272-acre Colorado Springs Airport Business Park — an $800 million venture.
COPT tenants in Colorado Springs have included Lockheed Martin, the Government Services Administration, BAE Systems, Northrop Grumman, Boeing, Inc. and Integral Systems to name a few — most drawn to the area by valuable government and defense work conferred by contracting offices at Peterson Air Force Base, Schriever Air Force Base or by the Department of the Army at Fort Carson.
The company works primarily with defense technology and aerospace tenants in its other geographic areas and hoped to leverage its relationships with its national tenant base to fill buildings in Colorado Springs, then-CEO Griffin told the Business Journal in 2008.
Griffin retired in March and was replaced by previous president Roger Waesche Jr.