The San Francisco company that bought one of Denver’s first skyscrapers in August has put the building back on the market.
Page Mill Properties is marketing the 30-story Lincoln Center, 1660 Lincoln St., as part of a package that includes more than 4 million square feet of office space, primarily in the San Francisco Bay Area.
“Normally, we might have held it longer, but we started getting interest in the asset as soon as we bought it,” said David Taran, Page Mill’s chief executive.
Page Mill is asking for bids on the entire portfolio as well as individual buildings, Taran said. Page Mill, a $290 million fund created by Divco West, paid nearly $36 million for the 274,582-square-foot Lincoln Center.
Lincoln Center is the second Denver office building to be put up for sale recently as part of a larger package including mainly California buildings. An Australian company, Macquarie Properties, is buying an 80 percent stake in downtown Denver’s Wells Fargo Center, better known as the “cash-register building” for its curved design, in a deal expected to close by the end of the year. Like Lincoln Center, it would be the second time the building will have changed hands in less than a year.
An Australian group also is looking at Page Mill’s portfolio, said Taran, who declined to name the company or other groups that are interested in the properties.
Australians increasingly are looking to the United States to invest money in real estate and large infrastructure projects such as roads and bridges. The country’s wealth is a result of a 14-year economic boom combined with a 1992 law requiring workers to set aside big chunks of income for retirement, according to a report in The Wall Street Journal.
The retirement pool, which is invested by private-sector managers, is about $550 billion, with about $70 billion to $80 billion more added each year. As a result, the pool of assets under management in Australia is among the largest in the world, but because Australia’s economy isn’t big enough to absorb the cash, investors there have had to find ways to spend it elsewhere.
The demand for investment properties is creating a spike in valuations, said lawyer Jay Kamlet, co-founder of Kamlet Shepherd & Reichert LLP, a Denver law firm that focuses on real-estate transactions and finance.
“The demand is so much greater that people are bidding on these properties more to get their money out the door than is justified by the income of the buildings,” he said.
Existing real-estate private-equity funds held $17.5 billion of capital to invest from funds raised through the end of 2004, and they expected to raise an additional $18 billion in 2005, according to an Ernst & Young LLP survey of 60 U.S.-based fund sponsors representing over 175 individual funds.
The survey indicates the real-estate private-equity sector will have well over $100 billion of leveraged purchasing power for new acquisitions heading into 2006.
Staff writer Margaret Jackson can be reached at 303-820-1473 or mjackson@denverpost.com.
