Denver Office Buildings Go Up For Auction, Ebay Style

Now’s your chance to buy a Denver office building – online. 

A 16-story office tower on 17th Street in the city’s central business district is up for grabs on Ten-X, an internet marketplace for commercial real estate. The starting bid is $750,000. 

If that sounds ridiculously low for an office building, that’s because it is. It’s set by Ten-X to spark interest in the property and is typically well below what a building is realistically worth. 

Even so, the final price will likely be a fraction of what the current owner paid for it. The building was purchased for $26 million in 2015, according to city records. Today, the Denver County assessor estimates it’s worth $7.6 million. 

Landlords don’t often resort to selling buildings in the heart of major metropolitan areas online for a huge loss. But it’s a sign of the times in Denver. Some property owners just want to cut their losses as a record amount of empty, outdated space hangs over the city’s downtown economy. 

Online auctions are fast

Ten-X has been around for a while. The platform, originally called Auction.com, really took off by selling distressed commercial real estate online in the aftermath of the financial crisis. It’s since been acquired by real estate data giant CoStar Group and expanded to include a wider array of commercial properties. 

But it’s still not how sellers market high-value buildings in prime locations. Those kinds of deals take months of negotiations between buyers, sellers, brokers and lenders. 

Landlords are more likely to turn to an online auction when they want to sell a property fast, according to Vivek Sah, director of DU’s Burns School of Real Estate and Construction Management. That would be appealing to some owners holding real estate in Denver, where buildings are selling at a 90%discount to pre-pandemic prices, he said. 

It costs money to keep the lights on, make sure elevators are working and pay taxes. 

“For those properties, it’s not a matter of value now, it’s a matter of how quickly can the seller offload it,” Sah said. “If this platform is allowing for that, they really don’t care. They’re not nickel-and-diming on these. They just want to get it out of their portfolio.” 

The 17th Street property, built in 1975, sits across from the Brown Palace Hotel. It was reportedly in line to get funding from the Downtown Denver Development Authority to be converted into apartments. But the request was denied. 

The building is being pitched as a conversion opportunity. The Ten-X listing touts its proximity to the Colorado Convention Center, Civic Center Park and downtown hotels and corporate headquarters.

The auction started Monday. It ends Wednesday. 

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