The Hudson’s Bay Centre office tower in downtown Denver has sold to a local buyer for nearly 80 percent less than it fetched a decade ago.
Denver-based Dikeou Realty bought the 20-story building at 1600 Stout St. on Monday for $8.95 million, according to public records.
That works out to about $52 a square foot for the structure, which CBRE marketing materials described as nearly 172,000 square feet. BusinessDen broke the news last month that the deal was expected.
“Game plan is to keep it as an office tower,” said Pete Dikeou, a member of the family real estate firm’s fourth generation. “We’ve got tenants in there through 2030 at least.”
The sale price is a far cry from April 2014, when an entity affiliated with Canada’s Artis Real Estate Investment Trust bought the tower for $41.5 million, records show. Artis said it then bought out a partner in 2018 in a transaction not reflected in public records that valued the tower at $38 million.
Monday’s sale is 78 percent lower than the 2014 price.
Dikeou, 32, noted that Dikeou Realty owns the adjacent seven-story Colorado building at the corner of 16th and California streets. The firm has its office there but will likely move to Hudson’s Bay, he said.
Last December, Dikeou Realty bought the standalone parking garage at 1627 California St. Dikeou said that “was something we bought with Hudson’s Bay in mind.” The tower has only 40 parking spaces below it, and the family wanted to have more parking available to offer tenants.
The tower, which sits on just over a quarter acre, was built in 1982 and renovated in 2017 and 2018, according to CBRE, which marketed it for sale. It is 57 percent leased and has relatively small floorplates, averaging 9,400 square feet. The latter can make a building more suitable for a residential conversion, although Dikeou said Hudson’s Bay still “doesn’t set up ideally” for that.
Dikeou said the tower has a “great location.” While the 16th Street Mall is currently torn up by Hudson’s Bay, Dikeou said the renovated portions that have reopened look great, and he believes foot traffic will return when the project is completed and that Mayor Mike Johnston is focused on revitalizing downtown.
“We’re very appreciative of all the work he’s done,” Dikeou said.
Dikeou said the firm plans to renovate the lobby at Hudson’s Bay and install works from the family’s art collection. After that, it will upgrade the fitness center and HVAC system and potentially add amenities such as a sauna. The company is also looking at adding a rooftop deck and clubhouse.
Dikeou said the family arrived at the $8.95 million price point after factoring in the cost of those renovations, plus the $3 million to $5 million it expects to need to spend in order to comply with Energize Denver, a city energy-reduction initiative that landlords are currently fighting in court.
Dikeou Realty was started by Dikeou’s great-grandfather, who emigrated from Greece in the 1920s and started buying real estate following the Depression. The family portfolio is heavy on parking — with numerous lots in and around downtown Denver and airport parking facilities in three cities out of state.
The company also owns some buildings — Hudson’s Bay is its largest holding by square feet — and has developed some retail properties. Dikeou, who joined the firm after working for the apartment developer Lennar Multifamily Communities/Quarterra, said more development could be in the company’s future.
Asked whether the firm might buy other office buildings on the cheap, Dikeou said it was possible, but “this one was unique based on its location for us.”
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