The Massachusetts Pension Reserves Investment Management Board (Mass PRIM) has bought an office asset in Denver.

The US pension fund paid $171.5m (€158m) for the 1515 Wynkoop office property, according to a pension fund document.

The purchase, at a cap rate of 5.1%, is evidence of investors looking for better pricing and higher cap rates outside major US gateway markets.

Mass PRIM bought the 306,791 sq ft property through its separate account manager, Invesco Real Estate.

The deal was Invesco’s twentieth for Mass PRIM.

The deal is around 100 basis points away from the low cap rates of San Francisco, where office properties have traded at more than $700 per sq ft and reflected yields of around 4%.

The Denver property traded at $559 per sq ft.

Before the deal, Mass PRIM’s portfolio with Invesco was pegged at $758.1m, according to a pension fund document.

Leverage on the portfolio was 9.5%.

Invesco will need to sell properties for Mass PRIM to free up capital to invest, as the pension fund’s remaining allocation before the Denver purchase was $122.7m.

Sales of existing assets in the portfolio could happen this year, with $227.1m of targeted disposals planned by Invesco for Mass PRIM in 2015.

Three properties, including apartment complexes in Atlanta and West Chester, Pennsylvania, are pencilled for sale.

The deal is part of $800m of capital the pension fund’s separate account managers have to invest this year.

AEW Capital Management, JP Morgan Asset Management, LaSalle Investment Management and TA Associates all manage Mass PRIM investments.