Luzzatto Company Buys Denver Energy Center Buildings

The Luzzatto Company is adding to its growing holdings in Denver.

The Los Angeles-based firm bought the Denver Energy Center at auction for nearly $5.3 million, the Denver Business Journal reported.

Los Angeles-based Gemini Rosemont bought the 28- and 29-story towers at 1625 and 1675 Broadway in 2013 for $176 million. In 2022, JP Morgan Chase Commercial Mortgage Securities Trust bought the Denver Energy Center for $88.2 million in a foreclosure auction after Gemini Rosemont failed to make payments on its $102.6 million mortgage.

Luzzatto Company president Asher Luzzatto is looking to convert at least one of the towers from offices to housing, according to the Business Journal. It’s a further expansion in the Denver market for Luzzatto after breaking into the city earlier this year.

“Denver is distressed in a way that doesn’t actually comport with the underlying fundamentals,” Luzzatto told the Business Journal. “For those reasons, we really loved the market and want to be active in it. The last year or so has just been trying to figure out how, but we’ve obviously figured that out in the sense that office-to-residential is how.”

Because office values have declined “drastically” in Denver, “it actually positions these office buildings as prime targets for residential conversions where the numbers make sense,” Luzzatto said.

In April, The Luzzato Company made its Denver debut with the purchase of office towers at 621 and 633 17th Street for $3.2 million. At the time, it announced plans to turn the office towers, located near the Denver Energy Center into about 750 income-restricted residential units, Bisnow reported.

At the Denver Energy Center’s 1625 Broadway tower, Luzzatto is similarly looking to turn offices into residential. That conversion, however, will keep some offices intact, while the 17th Street buildings won’t.

The Denver Energy Center spans 785,549 square feet and is 18.2 percent occupied with 16 tenants total in the towers, according to Crexi data cited by the Business Journal. Because those tenants are concentrated in the 1675 Broadway tower, Luzzatto will maintain office space there and create approximately 500 residential units between the two towers.

The Luzzatto Company, as with the 17th Street project, plans to apply for Downtown Denver Development Authority funding to help revamp the Energy Center towers.

— Chris Malone Méndez