Who Bought Terrace Tower: and for How Much?
Real Capital Solutions of Louisville and Dunton Commercial of Greenwood Village acquired Terrace Tower through a partnership. The deal marked a Colorado-to-Colorado ownership change for the 12-story office building at 5619 DTC Parkway.
Buyer partnership
The firms acted as co-buyers rather than as a single purchasing entity. Dunton Commercial was reported to oversee leasing, operations, and management.
The transaction shifted ownership from Sun Life Assurance Co. of Canada, which had owned the property since 2012.
Denver’s office vacancy rate reached 36.8% in Q2 2025, reflecting continued pressure on the office leasing market.
Price disclosure
Some reports did not disclose the purchase price. Public-record reporting, however, placed the sale at $23.8 million.
Other coverage characterized the deal as a 37% discount and a purchase at a fraction of replacement cost. Those descriptions indicate a substantial gap from building costs, but they do not establish a precise comparison price.
The tower contains about 243,464 square feet. It was 72% leased at the time of the announcement.
What Was the Sale Price Per Square Foot?
Terrace Tower sold for approximately $87 per square foot, based on its $23.8 million sale price and reported 245,000-square-foot size.
Building size calculation
Dividing the reported purchase price by the published building area produces a per-square-foot valuation of about $87.
Another account lists the tower at approximately 243,464 square feet. Using that figure yields a slightly higher result, still in the high-$80s range.
The published calculation uses 245,000 square feet, providing a consistent basis for the reported figure. The difference between the two area estimates does not materially change the transaction’s square-foot pricing.
This metric relates the total purchase price to the property’s reported floor area. It gives readers a straightforward way to understand the transaction’s scale without treating the two reported building sizes as identical.
Denver’s industrial market had an 8.4% vacancy rate in Q2 2025, reflecting a year-over-year increase.
Why Was the Deal Below Replacement Cost?
Although Terrace Tower reportedly would cost about $500 per square foot to reproduce, it sold for roughly $87 per square foot. The gap reflects a market that values current income and occupancy prospects far below construction cost—not simply a discount to building expenses.
Denver Tech Center vacancy has been reported near 19%, with about 9 million square feet empty. That level of availability can constrain rents, slow leasing and reduce expected cash flow.
Vacancy-driven discounts reflect the risks buyers see in filling space and sustaining income. Through income-based valuation, purchasers focus on a property’s expected earnings rather than the cost of constructing a comparable tower.
Distressed conditions and the lawsuit’s resolution may also have pressured the sale price. With rents and occupancy unable to support new-build economics, replacement cost offered little guidance to buyers evaluating the asset.
How Does the Sale Expand RCS’s DTC Portfolio?
The purchase adds Terrace Tower, a 243,464-square-foot Class A office building in Greenwood Village, to RCS’s expanding Denver Tech Center portfolio. It marks the firm’s 15th office acquisition since 2024 and was made jointly with Dunton Commercial, extending RCS’s local ownership footprint.
RCS has acquired about 900,000 square feet in the Tech Center corridor over the past two years. Its holdings include Belleview Tower, MetroPoint I and II, and 116 Inverness Drive E.
Together, these purchases reflect sustained DTC portfolio growth and a clustered ownership strategy, rather than a series of isolated investments. Terrace Tower adds depth to the portfolio’s concentration in the DTC submarket, including prominent Class A space in the core corridor.
Its scale also expands RCS’s presence across multiple buildings and product types, supporting greater operational reach and potential leasing flexibility within the submarket.
What Does the Sale Signal for DTC Offices?
Beyond expanding RCS’s DTC holdings, the Terrace Tower sale highlights how persistent vacancy and financing pressure are repricing office assets.
Buyers appear to be valuing many DTC properties well below pre-pandemic levels while distinguishing competitive buildings from aging stock.
Pricing reset: BusinessDen reported a $23.8 million sale, or about $87 per square foot. Comparable deals, including Regency Plaza, also closed below earlier valuations, reflecting higher borrowing costs and maturing loans.
Uneven demand: DTC vacancy remains elevated, though below downtown Denver’s reported 38% rate. Terrace Tower was approximately 72% occupied at purchase, broadly consistent with metro trends.
Selective investor sentiment: The office market is bifurcated: well-located, higher-quality towers continue to attract capital, while older assets face steeper discounts.
Local buyers’ acquisition signals confidence in DTC’s long-term relevance, not an immediate recovery.
Assessment
Terrace Tower’s sale to RCS Real Estate Advisors adds a major office property to the firm’s Denver Tech Center portfolio at a price below replacement cost. The transaction underscores the gap between current office valuations and the expense of developing comparable space.
The deal also reflects ongoing pressure on DTC offices as owners and investors reassess pricing, demand, and future capital needs. Its longer-term significance will depend on how RCS positions the tower and how the district’s office market evolves.
