Lakewood Office Tower Sells at 32% Discount

Union Tower Sale Price and Discount

At $17.3 million, the off-market sale of Union Tower closed at a steep discount from its prior cycle peak.

Public records and multiple reports place the building’s 2017 trade at $25.3 million, making the latest transaction about 32 percent lower. The buyers said the deal reflects a flight to quality strategy as they plan upgrades to better compete for tenants.

That decline aligns with recent Denver-area office repricing, where comparable assets have recorded reductions between 30 and 35 percent.

Pressure on Valuation

The 210,000-square-foot Class B property traded at about $123 per square foot.

Current occupancy of 73 percent points to leasing risk, even as renovated amenities and parking support competitiveness.

Analysts generally view such discounts as evidence of weaker market liquidity and slower capital flows for suburban office assets.

Lease rates of $26 to $28 per square foot FSG suggest revenue potential, but tenant turnover remains a valuation concern.

Who Bought Union Tower in Lakewood

Dunton Commercial and Laminar Real Estate acquired Union Tower at 165 S. Union Blvd. in Lakewood. The deal marked the first local partnership between the two Greenwood Village commercial real estate firms.

Public reporting described the buyers as locally based and framed the purchase as a notable move in the Lakewood office market.

The acquisition comes as investor appetite for affordable housing and other real estate sectors has strengthened alongside improving market confidence.

Key Buyer Details

1. Both firms are based in Greenwood Village.
2. The acquisition brought together two local operators.
3. The asset is Union Tower, Lakewood’s tallest office building.
4. First Interstate Bank financed the purchase.

The seller was Newport Beach-based Cress Capital. The property had previously been tied to ownership by C-III Capital Partners and Cress Capital.

Union Tower totals about 205,817 square feet across 10 stories. It is a prominent South Union Boulevard office property near the Federal Center transit station.

Why Union Tower Sold at a Discount

Why did Union Tower trade lower than its prior sale?

The roughly $17.3 million price was about 32% below the 2017 transaction, reflecting weaker income expectations and a softer office market. At about 73% occupied, the building carried meaningful vacancy and tenant-mix risks, which likely pressured underwriting and reduced what buyers would pay.

Pressure on Older Office Assets

Built in 1982, Union Tower competes with newer, amenity-rich offices that generally lease more easily.

Even though buyers called it the finest building in its submarket, older assets often face slower leasing and rent pressure.

Higher borrowing costs and refinancing strain across the office sector also affect the capital stack.

Broader regional pressures, including construction inflation and labor shortages, have also made real estate investment decisions more cautious across the Seattle-area market.

That backdrop likely increased seller flexibility while allowing buyers to demand valuation concessions without the sale appearing distressed.

What the Sale Says About Office Values

That discount also functions as a price-discovery signal for Lakewood office values.

The roughly 32% markdown from 2017 levels indicates that older peak assumptions no longer match current underwriting in capital markets. At about $17.3 million for 205,800 square feet, the transaction points to a benchmark near $123 per square foot.

What the Sale Indicates

1. It suggests a new market-clearing level for some suburban office assets.
2. It can influence appraisals, lending decisions, and acquisition models.
3. It aligns Lakewood with national office repricing, not a purely local event.
4. It shows premium assets can still trade when tenant demand supports liquidity.

National figures reinforce that context, with office prices down year over year and many repeat sales closing below prior values.

Even resilient suburban properties remain exposed to valuation pressure.

How Lakewood Office Prices Are Shifting

Recent pricing data shows a fragmented shift in Lakewood’s office market rather than a uniform rebound.

Average office pricing reached $24.15 per square foot in 2024, up 4.93% from the prior year. Average sale pricing hit $60.28 per square foot, while listing averages near $283 revealed wide market segmentation across asset quality, location, and deal expectations.

Only five office transactions closed in 2024, totaling $37.9 million. That limited activity can sharply skew averages, especially when distressed or trophy assets dominate a small sample.

Vacancy averaged 22.18%, signaling soft occupancy and continued pressure on owners. Lease rates between $18 and $25 per square foot showed competitive conditions shaped by tenant preferences, amenities, and submarket strength.

Pricing therefore appears selective, uneven, and vulnerable.

Assessment

The Union Tower sale underscores the pressure facing suburban office assets as higher vacancies, financing costs, and weaker demand continue to reset valuations.

A 32 percent discount signals that buyers are pricing in prolonged risk rather than a near-term recovery.

In Lakewood, the transaction points to a market where office owners may face further write-downs, tighter refinancing conditions, and longer leasing timelines.

Property values continue to adjust to a harsher operating environment.

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