Developer John Madden is putting Palazzo Verdi in Greenwood Village on the market with plans to use the proceeds from the sale to develop two new office buildings.
The 422,000-square-foot building, which includes 300,000 square feet of office space and the Madden Museum of Art, is expected to fetch more than $96 million. The building also features a large atrium that is used for events.
"There's a demand coming back for top-quality real estate," Madden said. "We're probably not where we were two or three years ago, but we're getting back to where ... excellent products are becoming desirable."
The mortgage on the 15-story building at 6401 S. Fiddlers Green Circle, which was fully leased to Ciber and Newmont Mining when it opened in November 2008, is roughly $58 million.
There has been demand for high-quality assets from public and private real estate investment trusts, as well as private-equity buyers, said John Jugl, executive vice president of Jones Lang LaSalle, who is marketing the property.
"It's quite possible it will attract international interest just because of the quality of the asset," Jugl said. "It eclipses just a Denver asset because of the quality and the tenancy. It rises to the national level."
Investment broker Mary Sullivan of CB Richard Ellis said the long-term leases will make the property more attractive to buyers.
"There is an acute imbalance of supply and demand," Sullivan said. "There is enormous demand coming from the capital side, both debt and equity, and there is a severe shortage of product. It's creating a scarcity premium."
Madden, widely considered to be a risk-taker, said he wants to build two 300,000-square-foot buildings in either Greenwood Village or Centennial. Over the past 40 years, he has developed more than 10 million square feet of real estate. Trademarks of his buildings are outdoor art and use of distinctive materials, such as travertine marble.
"If we've got the money in hand and go out and build a building and use our guts, I kind of like that model," Madden said. "We think putting our own money into new development versus using other people's money is more expensive and more difficult. Getting financing takes the pioneer spirit away."
Margaret Jackson: 303-954-1473 or firstname.lastname@example.org