Rainwater buys into Denver's office market. (real estate investor Richard Rainwater; Denver, Colorado)(Real Estate)

REIT building Colorado portfolio

Richard Rainwater has a hunch about Denver's office market, and he's betting millions on it.

Best known as the financial wizard who turned the Dallas-based Bass brothers' $50 million oil inheritance into a $5 billion gusher over 16 years, Fort Worth, Texas-based Rainwater decided to grease his own fortune in the late 1980s. The fiftyish Rainwater's own wealth now reportedly tips the scales at $700 million.

Last year, the man who made a name for himself investing in health-care companies shifted his focus to real estate, launching Crescent Real Estate Equities Inc. Crescent, in fact, is the first company at which Rainwater has acted as chairman, and he resigned from two boards to do it.

A self-managed real estate investment trust, Crescent roared off the launch pad a year ago with $350 million burning a hole in its pocket. It's been buying up office buildings and hotels in growth markets across the country ever since. It's currently trying to raise even more capital, partly to take advantage of some $600 billion in mortgaged properties expected to be dumped on the market in the next five to 10 years.

The REIT doesn't just buy real estate. It plucks plum markets.

"We like to dominate a market," Gerald Haddock, Crescent's president and …