CASE STUDY:
Adams County Westminster Office

Buyer Representation: Purchasing a 55,000 SF Office Building

Client: Adams County Government
Project Type: Buyer Representation

A More Cost-effective Alternative

Purchasing saved Adams County much more money than finding Denver area office space for lease.

“… I feel strongly that the services provided to Adams County were far from ordinary. In fact, the quality of services provided to Adams County…during the last three years has been consistently of the highest quality.”

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Pat Myers

Director of Facility Operations & Planning, Adams County, Colorado

Key Services Provided

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Located the building purchase option

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Provided detailed lease vs. buy analysis

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Negotiated an aggressive purchase price and terms

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Negotiated a detailed purchase contract that protected Adams County with detailed contingency provisions

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Coordinated the due diligence process including environmental, structural, mechanical and architectural inspections, as well as reviews of title and survey issues

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Addressed other issues that arose, thereby allowing a smooth closing on the purchase transaction

Enhancing the Delivery of Numerous Services to Adams County Residents

We were engaged by our client, Adams County, to help locate and negotiate an approximately 35,000 RSF office lease in the NW Denver area for a facility to house several Adams County departments. After researching and touring a number of potential options, we had not yet found the ideal solution. Our tenacity did paid off, however, when we located an attractive office building for sale within the targeted location. The building was an approximately 18-year-old, Class B+, 55,000 SF office building, in good condition, owned and occupied by a relocating oil and gas company. At this period in 2003, the office market in the Metro Denver area was slow and this office building had been on the market for some time.

A More Cost-effective Alternative
Although we had been asked to locate property for lease, we suggested that our client tour the building. We found that the building had many attractive features, including an underground parking garage (very rare in that submarket), a large raised floor computer room, an attractive entrance lobby, fantastic western views and a back-up electrical generator. The building sat on approximately four-acres with abundant parking, attractive landscaping, easy access and prominent monument signage. Additionally, the building was being sold with an adjacent four-acre expansion lot that would be sold off if unneeded, or held for the future construction of another similar size office building — ideal for future expansion. Some quick calculations showed that the occupancy costs could be considerably more favorable than leasing if we could purchase the building at an attractive price.

The Process

Through careful research, we determined that the building owners were ready to sell the property at a significant discount. The oil and gas company had already signed a large long-term office lease in Denver and would be relocating within a few months. The company wanted this building off its balance sheet. We knew our client could purchase the building as a cash transaction and could move quickly through the due diligence process. Having completed our homework, we made an aggressive purchase offer. After negotiating the purchase, we were able to put the property under contract and eventually close on the building for a purchase price close to $50.00 per SF, or approximately 1/3 the replacement cost for a similar building! Adams County was able to provide top-quality facilities for a variety of county departments at a cost far less than leasing.

The Guidance Advantage

By being flexible and creative, we developed a facility solution that (over a 10+ year period) will save our client several million dollars by purchasing versus an office lease of a facility. The building has enhanced the delivery of numerous services to Adams County residents and has been enthusiastically received by both Adams County employees and the general public.