NexGen Properties just bought up an office campus in Centennial. No tenant inside occupies more than two floors and the average suite is just 2,400 square feet.
“Companies need office space, they just need less. A lot of these big block tenants that have leased full floors downtown or in the tech center have just been giving up space,” said Matt Bernstein, vice president of acquisitions and asset management for NexGen.
“Thats why the overall office market has been getting a bad rap.”
The Greenwood Village-based real estate firm purchased 7200 S. Alton Way, a three-building, 6.6-acre campus, for $10.6 million earlier this month from San Francisco’s Graham Street Realty.
NexGen plans to invest $3 million into the 134,598-square-foot property over the next three years. Half of that will go towards general building improvements, and the other half to refreshing offices as leases turn over, Bernstein said. The property has consistently enjoyed high occupancy since it was built in 1980, according to Graham Street’s broker, Aaron Johnson.
“It’s a small tenant apartment-style office with spec suites, so very little capital required to continue the leasing success, which is attractive to investors,” said Cushman & Wakefield’s Johnson, who worked the deal with fellow broker Jon Hendrickson.
Graham Street purchased the building in late 2016 for $16.6 million, $6 million more than what it sold for this month. The company did not respond to a request for comment.
“We’re a family office, a local family office, so all of our money is all self-funded with private capital, we don’t syndicate, we don’t raise from anyone else, we bought this asset in all cash,” Bernstein said.
NexGen, founded in 2004, has other arms in venture capital and oil and gas. It uses revenue from these businesses to fund its real estate purchases. The company has a portfolio of more than 20 properties, from hotels to offices to warehouses across the state.
“We’re actively deploying capital, we’re always looking at new deals,” Bernstein said.
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