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The New Mural Rocks, But What Will Upgrades Do For Tower Colorado Profitability?

200-Foot Mural One of Several Upgrades Ogilvie Properties Has Made to Virginia Village High-Rise, Including Addition of Top-Level Office
June 14, 2018
Anyone who has driven north on Colorado Boulevard near Interstate 25 lately has probably taken a long look at a building that may have gone unnoticed until recently.

A nearly 200-foot-tall mural of a woman climbing vertically through a rock crevice now graces the skyline near the busy intersection, and it’s one of several upgrades made to that building, Tower Colorado, in an effort to spruce it up for tenants, both new and existing.

Courtesy of Denver-based Ogilvie Properties, Tower Colorado in Denver’s Virginia Village neighborhood is among the latest Denver office buildings getting an update, with ongoing renovations including a new lobby and upper floor, in addition to the mural, which is called "Free Climber" and was completed by local artist Chris Krieg.

Ogilvie purchased the 184,640-square-foot building in early 2016 for $15.8 million, and set to work updating the 1970s-era structure, with the aim of luring tenants willing to pay a higher price for office space.

The top two levels of Tower Colorado formerly housed racquetball and basketball courts, plus a mezzanine running track, said Stuart Ogilvie, founder and president of Ogilvie Properties. His team converted that space into an additional 18,000 square feet of office space, including the mezzanine, at the top of the 16-story building.

That included installing floor-to-ceiling windows in a room that used to be mostly windowless, and extending the building’s elevator bank up to floors that were once only accessible by stairs.

The fitness center was relocated to the second floor, which also houses an updated break room. The process was lengthy and complicated, Ogilvie said, but the top-floor renovation was completed this month.

Upgrades to individual floors, which include new finishes on the elevator banks, are still underway, and next month Ogilvie will kick off the lobby renovation, which will add a grab-and-go food option to the building.

He expects the lobby to be finished in September and the full suite of renovations to be complete in spring 2019. In all, Ogilvie Properties will have plowed about $5 million into the building at completion with the hopes of boosting its profitability.

With the exception of the new top floor of the building, asking rents for office space in Tower Colorado are $25 or $26 per square foot, full-service, Ogilvie said, while he’s asking for rents in the mid-$30 range for the "Skybox," as the uppermost floor has been dubbed.

Excluding the Skybox, Tower Colorado is 90 percent leased, Ogilvie said.

It’s standard operating procedure for Ogilvie to buy a building, execute some renovations geared toward improving leasing and then sell the property.

Just last month, the company sold 3300 E. First Ave., an office and retail building in Cherry Creek, for $37.5 million, having purchased it for $10.5 million in 2013 and completing $6.5 million in upgrades.

Both buildings underwent energy-efficiency enhancements as part of their renovations with the help of a new program created by a 2013 state law that helps property owners finance such improvements.

The Commercial Property Assessed Clean Energy Program, or C-PACE, hasn’t been used much yet, but the program promises to help commercial property owners finance green upgrades to their buildings and see quicker return on their investment for doing so, something that was attractive to Ogilvie.

His company usually holds properties for a shorter period of time, similar to the five-year hold on 3300 E. First Ave., but generally it takes property owners much longer than that to see return on green building investments.

The C-PACE program was specifically established to help property owners see quicker return on green building investment with the goal of promoting energy efficient building in Colorado.

Molly Armbrister, Denver Market Reporter  CoStar Group   

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