Ivanhoé Cambridge has acquired an approximate 40 per cent interest in a portfolio of properties in downtown Denver from Canada Pension Plan Investment Board (CPPIB) for more than US$200 million.
The deal includes US Bank Tower, Tabor Center and the adjacent Two Tabor development site. It makes Ivanhoé Cambridge one of the main landlords in Denver’s commercial business district, with an ownership position representing approximately six per cent of class-A office inventory. (US Bank Tower on the left and Tabor Center on the right in the image.)
Denver is a top-performing American office market driven by high growth industries including energy, healthcare, technology and aerospace.
“We are pleased with the progress in executing our strategy of building a critical mass of high-quality office properties while diversifying our footprint across leading U.S. markets,” said Adam Adamakakis, Ivanhoé Cambridge executive vice-president of United States investments.
“We continue to capitalize on opportunities to grow and enhance our platform with Callahan Capital Properties and we are very enthusiastic about entering the dynamic Denver market through an investment which provides further expansion opportunities.”
Joined forces with CCP in 2012
Montreal-based Ivanhoé Cambridge — a real estate subsidiary of institutional fund manager Caisse de dépôt et placement du Québec with a $40-billion portfolio consisting mainly of shopping centres, office and multi-residential properties in Canada, the United States, Europe, Brazil and Asia — joined forces with Callahan Capital Properties (CCP) in December 2012 to develop its American office real estate platform and manage its expanding office portfolio.
The strategic relationship with the Chicago-based real estate investment firm has given Ivanhoé Cambridge: access to a pipeline of investment opportunities; an extensive national network of contacts and local market knowledge; proven and efficient market-specific asset management expertise; and enhanced capabilities to execute large, complex transactions.
The Denver purchase is Ivanhoé Cambridge’s sixth acquisition made with CCP, bringing the partners’ U.S. office platform investments to more than US$2.4 billion. A CCP affiliate continues to be an equity partner and the asset manager for these previously acquired properties: 330 Hudson, 1211 Avenue of the Americas and 1411 Broadway in New York City; 10 and 120 South Riverside Plaza in Chicago; and 999 Third Ave. in Seattle.
Ivanhoé Cambridge public affairs and media relations VP Sébastien Théberge said the company wasn’t in a position to disclose who owns the remaining share of Tabor Center, US Bank Tower and Two Tabor.
CPPIB adjusts its real estate strategy
Toronto-based CPPIB invests in public and private equities, real estate, infrastructure and fixed income instruments. The board is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. The CPP Fund totalled $226.8 billion, including $24.6 billion in real estate investments, on June 30.
“The sale is a result of our continuous review of our total real estate portfolio in the context of our core strategy and diversification,” CPPIB said of the Denver properties sale in a statement to RENX. “We continue to focus on other core U.S. office markets, primarily in the West Coast and Northeast.”
Tabor Center is a class-AA, 30-storey, 51,480-square-metre (572,000-square-foot) office tower and a three-floor, 14,670-square-metre (163,000-square-foot) mixed-use property located at 1200 17th St. offering retail and health club amenities. It was built in 1985, renovated in 2000 and is widely regarded as the most prestigious business address in downtown Denver. It enjoys market-leading rents and occupancy and features a five-level underground garage with more than 1,700 spaces.
The property is bounded by 17th Street, the 16th Street Mall and the thriving Lower Downtown (LoDo) neighbourhood, which offers an abundance of retail, dining and entertainment options.
US Bank Tower is a class-A, 26-storey, 46,800-square-metre (520,000-square-foot) office tower located at 950 17th St. that offers some of the best Rocky Mountain and downtown views in the city. It was built in 1974, renovated in 2008 and is equally accessible to the 16th Street Mall and LoDo. There are 166 reserved parking stalls in a two-level garage below the tower.
“We believe the site for Two Tabor to be a highly strategic location and, once it goes ahead, it will be developed as best-in-class,” Théberge said of the still undeveloped site.