Downtown Boulder’s newest office building is gearing up to open next month, and almost before the dust has settled, the sale ofPearlWest is being discussedat a figure experts estimate could easily reach $140 million.
At those prices it could become the most expensive sale in Boulder’s history and a new benchmark for the city’s super-hot commercial real estate market.
“We have discussed the idea with the partners about selling the building,” said Randy Nichols, president and founder of Denver-based Nichols Partnership, the project’s owner and developer.
However, he said, it’s still just talk; no formal action has been taken by the partners.
“At this point, there’s no contract, no agreement — nothing has happened. It remains to be seen what will happen.”
If the site of the former Daily Camera buildings at 1048 Pearl and 1023 Walnut St. does sell, it would probably be the priciest real estate transaction in the city’s history.
“An asset like PearlWest will sell for somewhere between $550 and $600 a square foot at the low end and $800 a square foot at the high end,” speculated longtime local developer Lou Della Cava — putting the final price tag between $96 million and $140 million for the 175,000 square foot property.
That dwarfs the price tag on other recent large real estate deals, like the city’s $40 million buy of the8.8-acre Boulder Community Health Broadwaycampus in December and the sale of more than 1 million square feet of office space toSeattle-based Unico for $168 millionin early 2015. Even if PearlWest sells at $550 a square foot, that’s more than five times the $68 per square foot the Unico properties sold for.
“(PearlWest is) a stable property; it’s new and it’s in a part of town where the barriers to entry are high,” Della Cava said.
A construction worker passes by PearlWest, which has 160,000 square feet of office and retail space, in downtown Boulder.
Wealth management firm Crestone Capital, an investor in the project, was the first announced tenant, snapping up 30,000 square feet on the fourth floor, which it will occupy in mid- to late July
The company has since exercised an option for 6,000 more square feet, founder Dave Wright said Friday. A team of 300 will be moving in November.
“When we talked to Crestone (about leasing space) we talked to them as an investment company, so it’s not surprising they would build it and sell,” he said. “But since they are occupying office space there, they indicated they might be open to holding it for a while as well.”Wright said no chatter had reached him or the other tenants about a pending sale but said it had been discussed as an option in the past.
All of the office space has been leased, according to a Crestone official, with tech companiesGalvanizeandTrade Desktaking 27,000 and 13,000 square feet, respectively.
On the retail side, a first-floor restaurant from California-based Eureka Group and a John Atencio jewelry gallery have been announced. Four remaining retail spaces and a rooftop restaurant are listed on the website of real estate firm Gibbons White, which also gives lease rates for the office and retail space of between $21 to $85 per square foot.
But leases are currently being signed for the remaining spaces, said Lynda Gibbons, and the building should be fully leased at the time of opening. The Pearl Street side should open in July with the Walnut Street side to follow in two to four weeks.
The public rooftop park has already begun being reserved for events for summer 2017, Gibbons said, adding that she has gotten “numerous requests” for the space.
“We couldn’t be more pleased with the way the building turned out and the tenants we have in there,” Nichols said. “We’ve got our incubator, our tech tenant, a homegrown investment company, a whole lineup of retailers and restaurants and entertainment for the area — exactly what we wanted for the building.”
“It’s kind of the new Boulder.”
As to the timing of a sale, Nichols wouldn’t speculate.
“We’re sworn to silence on anything that hasn’t happened yet.”
PearlWest by the numbers:
PearlWest by the numbers
175,000 square feet of office and retail space at 1048 Pearl St. and 1023 Walnut St.
Home to the Daily Camera for 119 years
Sold for $9 million in 2010 to L.A.-based Karlin Real Estate
Sold again in 2012 for $13.5 million to Denver’s Nichols Partnership
$80 million: Original projected cost
Current known tenants: SolidFire, Galvanize, Trade Desk, Crestone Capital, John Atencio jewelry gallery; Eureka Group restaurant.
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