Brookfield Properties sells downtown Denver office towers at $340M loss

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Brookfield Properties sells downtown Denver office towers at 0M loss — Brookfield Properties sells downtown Denver office towers at 340M loss.png

Brookfield and Lender Take $340 Million Loss on Downtown Denver Office Towers

Brookfield, along with its lender, has incurred a significant loss of over $340 million on two downtown Denver office towers.

The New York-based real estate giant recently sold 1.28 million square feet of office space within City Center at a sale price of $57.4 million, translating to $45 per square foot. This comes after Brookfield purchased the office space for $400 million in January 2020, just before the pandemic hit.

City Center comprises the 29-story office building at 717 17th St., also known as Johns Manville Plaza, and the 42-story building at 707 17th St. The sale only included the 22 office floors of 707 17th St., with the remaining 20 floors housing a Hilton hotel under different ownership.

The buyer of the property is Patrick Halloran, a Minnesota investor who acquired it through two LLCs. The office space currently has a 50% occupancy rate, down from 94% when Brookfield originally purchased it in 2020.

Despite the decrease in leasing numbers, Brookfield managed to secure two major wins in recent years. Johns Manville renewed its lease for 121,000 square feet at 717 17th St. in 2024, while Colorado’s labor department moved into 131,000 square feet at 707 17th St. earlier this year.

Brookfield financed its 2020 purchase with a $230 million loan from Wells Fargo Bank, which was initially set to mature in February 2025.

According to a Brookfield spokesman, the divestment of this asset will not impact their core U.S. office portfolio, which is currently 95% leased with a nearly 20% increase in net operating income since 2020.

Patrick Halloran, the buyer of the property, is the founder of private equity firm Wayzata Investment Partners. He has previously invested in distressed office properties in downtown Chicago and near O’Hare International Airport.

Wayzata Investment Partners also previously owned the Minnesota Star Tribune newspaper and held a significant stake in Delta Airlines.

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Contributions to this report were made by BusinessDen staffer Matt Geiger.