Another set of two office buildings on 17th Street in downtown Denver sold at deep discounts this year.
Brookfield Properties sold the offices at 707 and 717 17th St. – known as the Johns Manville Plaza – for approximately $28.7 million each to a Minnesota-based company tied to investor Patrick Halloran on Nov. 3, property records show.
The building sale at 707 17th St. included only the top 22 floors. The bottom 20 floors are a separate parcel home to the Hilton Denver City Center hotel.
Brookfield Properties originally bought the properties on the block between California and Stout Street on Jan. 31, 2020.
The Johns Manville Plaza sold for $205 million and 707 17th sold for $195 million — less than 40 days before the World Health Organization declared COVID-19’s spread a pandemic.
Following the pandemic, downtown Denver’s office real estate market saw a rise in vacancies that nearly hit 38% in the third quarter this year, according to commercial real estate firm CBRE.
Upper Downtown, where the two buildings are located, was hit especially hard.
Rising worries pushed city and downtown leaders to seek out alternatives, with a top priority to revitalize the part of downtown concentrated with office buildings by encouraging diversifying the area with more housing.
Though analysts are seeing some stabilizing improvements in leasing activity across downtown, properties are still selling for far less than they were originally bought for. The low prices are attracting new investors looking to scoop up distressed properties in Denver’s downtown market.
The new owner of the two buildings is an LLC tied to Patrick Halloran of Wayzata Investment Partners in Minnesota. Wayzata Investment Partners was a majority shareholder of the Minneapolis Star Tribune between 2012 and 2014.
Halloran also invested in several distressed office properties around Chicago last year, including one across the street from the iconic Willis Tower, according to Crain’s Chicago Business.
The two Denver buildings are across the intersection of California Street and 17th Street from another set of two towers that sold earlier this year at a huge discount.
The Luzzatto Co. purchased two towers at 633 and 621 17th St. for $3.2 million in April. In September, the company announced it was under contract to buy the two towers at the Denver Energy Center for $5.25 million. With both projects, the developers plans to convert a large portion of the tower’s office space for residential, retail and other uses.
