Centennial Office Value-Add Success Story

Transforming a Multi-Tenant Office Investment Through Strategic Acquisition, Leasing, and Investment Sales

Property Overview

Property: 7853–7955 E. Arapahoe Court, Centennial, Colorado

Property Type: Multi-Tenant Office Investment

Building Size: Two office buildings totaling 63,180 square feet (31,590 SF each)

The Opportunity

A local commercial real estate investor partnered with Jason Ruscio and Avant Group to identify a value-add office investment with strong cash flow potential and long-term appreciation.

After evaluating numerous investment opportunities throughout the Denver metropolitan area, Avant Group identified an underperforming two-building office complex in the Centennial market. While many investors viewed the property's vacancy as a challenge, our team recognized an opportunity to create value through strategic leasing and proactive asset management.

The property's suite mix, consisting primarily of 600 to 3,000-square-foot office suites, aligned perfectly with growing demand from small and mid-sized businesses throughout Centennial and the Denver Tech Center. Combined with the property's location and attractive acquisition basis, Avant Group developed a business plan focused on increasing occupancy, growing rental income, and maximizing long-term asset performance.

Strategic Acquisition

Avant Group successfully negotiated the acquisition for approximately $4,250,000, or approximately $67 per square foot, allowing our client to acquire the property at an attractive basis well below replacement cost.

At the time of acquisition, the property was producing an approximately 8.50% in-place capitalization rate, providing immediate cash flow while offering substantial upside through active leasing and improved property performance.

Rather than relying on significant capital improvements, our strategy focused on leasing vacant suites, improving tenant quality, increasing rental rates, and enhancing the property's overall operating performance.

Value Creation Through Leasing

Immediately following the acquisition, Avant Group launched an aggressive leasing campaign targeting the strong demand for small office suites throughout the Centennial and Denver Tech Center markets.

Within approximately nine months, our team successfully:

• Executed more than 18 new office leases

• Increased occupancy significantly

• Increased rental rates by approximately 20%

• Improved tenant quality and retention

• Significantly increased Net Operating Income (NOI)

As a result of the successful lease-up strategy, the property's in-place capitalization rate increased from approximately 8.50% at acquisition to approximately 15.76%, reflecting the substantial improvement in the property's operating performance.

Strategic Exit

One of Avant Group's greatest strengths is maintaining long-standing relationships with commercial real estate investors throughout Colorado.

Approximately twelve months after the acquisition, Jason Ruscio identified another experienced office investor seeking to expand into the South Denver market with stabilized, income-producing office assets. Acting as a Colorado Transaction Broker, Avant Group successfully brought both parties together and negotiated a transaction that aligned the objectives of both buyer and seller.

The property, originally acquired for $4,250,000 (approximately $67 per square foot), was successfully repositioned through strategic leasing and proactive asset management. Prior to the sale, the asset was producing an approximately 15.76% in-place capitalization rate based on the owner's investment basis.

The property was subsequently sold for $5,700,000 (approximately $92 per square foot) at an approximately 11.75% market capitalization rate, providing the purchaser with a stabilized, income-producing investment while allowing the seller to successfully complete its investment strategy.

Results

Through strategic acquisition, disciplined leasing, and proactive asset repositioning, Avant Group successfully transformed an underperforming office investment into a stabilized, high-performing commercial real estate asset.

Within approximately nine months, Avant Group:

• Executed 18+ new office leases

• Increased rental rates by approximately 20%

• Significantly increased occupancy and Net Operating Income

• Improved the property's in-place capitalization rate from approximately 8.50% at acquisition to approximately 15.76% prior to disposition

• Successfully repositioned the asset for disposition to another experienced commercial real estate investor

Approximately twelve months after acquisition, the property sold for $5,700,000 (approximately $92 per square foot) at an approximately 11.75% market capitalization rate, demonstrating the successful execution of the property's value-add investment strategy.

Project Highlights

• Property: 7853–7955 E. Arapahoe Court, Centennial, Colorado

• Building Size: 63,180 SF (Two Buildings)

• Purchase Price: $4,250,000

• Purchase Price Per SF: Approximately $67

• Acquisition In-Place CAP Rate: Approximately 8.50%

• New Office Leases Executed: 18+

• Rental Rate Growth: Approximately 20%

• Stabilized In-Place CAP Rate: Approximately 15.76%

• Sale Price: $5,700,000

• Sale Price Per SF: Approximately $92

• Exit CAP Rate: Approximately 11.75%

• Holding Period: Approximately 12 Months

Why This Project Was Successful

This transaction demonstrates Avant Group's ability to identify value-add commercial real estate opportunities, negotiate strategic acquisitions, execute comprehensive leasing initiatives, and guide investors through every stage of the investment lifecycle.

By combining market knowledge, leasing expertise, investor relationships, and disciplined execution, Avant Group successfully repositioned an underperforming office investment into a stabilized, income-producing asset before facilitating a successful disposition to another qualified investor.

Whether you're searching for a value-add office investment, looking to reposition an existing commercial property, or planning a strategic acquisition or disposition, Avant Group provides the experience, market insight, and execution necessary to help commercial real estate investors achieve their investment objectives throughout Colorado.