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Page 22 — COLORADO REAL ESTATE JOURNAL — February 18-March 3, 2015
Finance
by John Rebchook
HFF recently secured $57 mil-
lion in financing for One City
Block, a newly built, 302-unit,
Class A multihousing commu-
nity in downtown Denver’s
Uptown neighborhood.
Working on behalf of its dee-
loper, Denver-based RedPeak
Properties, HFF placed the
fixed-rate loan with Corner-
stone Real Estate Advisers LLC,
acting on behalf of an institu-
tional client.
Cornerstone, an indirect
subsidiary of Massachusetts
Mutual Life Insurance Co., is
headquartered in Hartford,
Connecticut.
The loan proceeds will be
used to replace RedPeak’s exist-
ing construction loan.
One City Block encompasses
a full city block bounded by
East 19th Avenue to the north,
Pennsylvania Street to the east,
East 18th Avenue to the south
and Logan Street to the west.
Completed in January 2014,
the property includes 207,598
rentable square feet of resi-
dential space and 10,035 sf of
ground-floor retail.
The four-story, LEED-certified
property stabilized in less than
a year and is 95 percent leased.
One City Block has a mix of
studio, one- and two-bedroom
floor plans and amenities,
including a lap pool with sun
deck and hot tub, grilling areas,
fire pit, sport court with prac-
tice putting green, four rooftop
terraces, fitness center, yoga stu-
dio, game room with pingpong
and pool tables, demonstration
kitchen, on-site bike repair shop
and pet spa.
Mike Zoellner, president of
RedPeak Properties, said One
City Block has exceeded expec-
tations.
“We had projected 18 units
per month of absorption and
the actual absorption was 30
units per month,” Zoellner said.
One of the reasons was the
timing.
“It opened at a time when a
lot of the new supply was not
yet available,” Zoellner said.
“People shopping for apart-
ments did not have as many
choices as they do today,” he
said.
Also, there is nothing else like
One City Block on the market,
he said.
“It has a different feel from
all of our competitors. When
you walk through the door, you
feel like you are in a small com-
munity, yet you have all of the
advantages of a 300-unit com-
munity,” he added.
Also, each building in One
City Block has a different design
and uses different bricks, so it
does not have a “cookie-cutter”
aesthetic, he noted.
Zoellner said working with
HFF on the refinancing was a
pleasure.
“HFF was just terrific to work
with,” Zoellner said.
“I think HFF is one of the best
in town,” he said. “They are
very professional and their mar-
ket research is great. And HFF’s
network of capital resources is
one of the best you will find.”
There was a huge amount of
interest from lenders on this
deal, said Eric Tupler, senior
managing director at HFF. He
handled the transaction with
Josh Simon, a managing direc-
tor, and Leon McBroom, an ana-
lyst, in HFF’s Denver office.
“We really went out to the life
insurance companies,” Tupler
said.
Not only were the life insur-
ance companies interested in
it, but also it would have been
appealing to any number of
institutional lenders, he said.
“This is a best-in-class asset,”
Tupler said.
“And it really has outstand-
ing sponsorship with RedPeak.
“RedPeak is a really experi-
enced operator and when you
combine that with the great
location and quality of con-
struction, it saw a great deal of
interest from those wanting to
finance it,” he said.
What is happening now, given
the record amount of apart-
ment construction in Denver,
is developers are looking to put
in place permanent financing
even before rents are stabilized,
Tupler said.
“We are very busy right now
with developers who have just
started the lease-up,” Tupler
said.
“If they plan to be medium- to
long-term owners, they want to
lock in debt at today’s low inter-
est rates,” Tupler said.
He said they are worried
about interest rates rising.
“Also, given the amount of
new construction, there is some
concern that they will be able
to continue to get these record
rents, given the competition
from the new supply coming
on line,” Tupler said.
One City Block, however, was
stabilized.
But it leased up very quickly.
Deservedly so, as it hit all of
the right buttons with renters,
Tupler said.
“It’s probably one of the nic-
est properties I have ever been
in,” Tupler said.
“It’s a dynamite property in a
dynamite location,” he added.
“Mike Zoellner has a great eye
for detail.
“The property flows very
nicely and has this Class A loca-
tion,” Tupler said. “Everything
about it is well conceived,” he
said.
“HFF provided RedPeak with
a wide range of very competi-
tive options and Cornerstone
was terrific to work with,”
Zoellner said.
“We look forward to doing
more business with both parties
in the future,” he said.
Tupler has done a number of
deals with Zoellner and Red-
Peak in the past.
“I’ve probably known Mike
for 15 years,” Tupler said.
“I knew him before he created
RedPeak.”s
RedPeak Properties recently refinanced its One City Block apartment
community.
Unit 1-E, in Fort Collins.
Annah Moore of Realtec
Commercial Real Estate Ser-
vices represented the landlord,
GWE LLC. Cobey Wess of Sper-
ry Van Ness/The Group Com-
mercial represented the tenant.
n SIR Environmental Con-
sulting signed a three-year lease
for 2,035 sf of office space at 7800
S. College Ave. in Fort Collins.
Erik Broman and Jeff Doran
of Realtec represented the land-
lord, Adams Bank & Trust. Bro-
man also represented the ten-
ant.
n PMAC Lending leased
2,001 sf of office space at 400 E.
Horsetooth Road in Fort Col-
lins from Realhorse LLC.
Michael Ehler of Realtec was
the listing broker. Erik Broman,
also of Realtec, represented the
tenant.s
‘RedPeak is a
really experienced
operator and when
you combine
that with the
great location
and quality of
construction, it
saw a great deal
of interest from
those wanting to
finance it.’
– Eric Tupler, HFF