University of Colorado Denver Buys Downtown Offices

The University of Colorado Denver is buying one of downtown Denver’s emptiest skyscrapers at a fraction of its pre-pandemic value.

The University of Colorado Board of Regents approved the nearly $29.8 million purchase of Independence Plaza, a 25-story office tower at 1050 17th Street, with the deal expected to close late last week, the Denver Business Journal reported. The deal gives CU Denver control of an entire downtown block, including the 567,000-square-foot Independence Plaza tower, two connected annex buildings and a 690-space subterranean parking garage. The price pencils out to $53 per square foot based on the size of the tower.

The purchase price is the latest evidence of the Denver office market’s fall from grace since the property sold almost two decades ago. Independence Plaza last traded in 2007 for $144.5 million to Independence Plaza Investment Group, an entity backed by an Alaskan public pension fund. In the latest transaction, CU Denver acquired the property for about 21 percent of its previous sale price.

The university plans to occupy part of the building while leasing the remaining space to outside tenants, using rental income, parking revenue and events to help offset operating costs. University officials framed the purchase as a long-term investment that expands CU Denver beyond its Auraria Campus a few blocks away.

Independence Plaza is 79 percent vacant, with tenants occupying six office floors and seven of its 23 retail and lower-level spaces. The building’s remaining leases generate more than $3.1 million in annual rent and run through 2030.

Rather than building new facilities, CU Denver determined buying an existing office tower offered the best path to future growth. The university proposed using the property to house departments currently scattered across multiple buildings, replace aging facilities, create instructional labs and accommodate partnerships with private employers aimed at strengthening student internship and workforce pipelines.

The university expects to sink some money into the site to prepare it for student and faculty use. A facilities assessment identified roughly $2.4 million in deferred maintenance over the next decade, primarily involving the building’s electrical and mechanical systems. The school also expects to fund a shuttle connecting Independence Plaza with the Auraria Campus.

CU Denver is financing the acquisition with campus reserves rather than state funding and is seeking support from the Denver Downtown Development Authority to help reposition vacant space for third-party tenants. The authority approved up to $13 million for the endeavor, Denverite reported.

— Chris Malone Méndez