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A recent appraisal for 1670 Broadway, a 690K SF office building in downtown Denver, pegged the building's value at about $131M, or roughly 55% of what it was appraised for in 2018 when it was last purchased, according to new data from Morningstar.
The building’s new value comes as Denver’s downtown office market struggles to recover from the pandemic.
Data from CBRE shows Denver recorded 80K SF of negative net absorption in the fourth quarter, a dramatic improvement from Q3's negative net absorption of 1.1M SF but still a far cry from pre-pandemic leasing levels. Leasing activity did tick up by 100K SF compared to the depressed Q4 2022, the data shows.
1670 Broadway is a 36-story office tower anchored by TIAA Life Insurance Co. The building was purchased in 2018 by New York-based real estate investment firm JM Capital LLC and Irvine, California-based Pacific Rim Capital for $238M.
Lenders placed the office tower in special servicing in September after the building’s owners defaulted on a mortgage balance of roughly $78M, the Denver Business Journal reported.
1670 Broadway’s struggles are happening as a glut of loans secured against Denver commercial properties is coming due. About $4.7B of commercial real estate loans in Denver will come due by the end of the year, representing about 26% of the $18.4B in outstanding loans, according to data from CommercialEdge.
Meanwhile, several of Denver’s most famous buildings remain under significant financial pressure. The Wells Fargo Center at 1700 Lincoln St. was placed in receivership in August following news that coworking company WeWork would leave the building. It is unclear how much debt is still attached to the 1.2M SF building.
Other prominent properties like the Denver Energy Center at 1625 and 1675 Broadway and 410 17th St. have gone into foreclosure as well. The Denver Energy Center was sold in 2022 by its lender, JPMorgan Chase, at a foreclosure auction for $88.9M, property records show.
410 17th St. was placed in foreclosure in July after a joint venture between Miami-based investment firm Rialto Capital Management and Denver development firm Steelwave defaulted on a balance of more than $96M.
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