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Page 6 — COLORADO REAL ESTATE JOURNAL — April 1-April 14, 2015
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Greater Denver
by John Rebchook
A San Diego-based company
recently purchased a prime val-
ue-add apartment community in
Westminster.
ColRich Multifamily bought
the 357-unit Sandpiper Moun-
tain community at 8200 Sheridan
Blvd.
Thesalespricewasnot released,
but records indicate ColRich paid
$31 million for the community,
which was built in 1973.
The seller, Bridge Investment
Group Partners based in Murray,
Utah, paid $16.9 million in 2008,
according to public records.
In other words, ColRich paid
57.4 percent more for the prop-
erty than the seller.
JLL Managing Director Pat
Stucker and Ray White, JLL vice
president, represented Bridge
Investment.
“Denver’s (metropolitan statis-
tical area) is experiencing strong
rent growth and the opportunity
to acquire a value-add play drew
interest from many investors,”
Stucker said.
“Plenty of jobs are coming to
the area, which will further drive
the property’s performance,” he
said.
Sandpiper has 30 three-story
buildings. Amenities include
three swimming pools, a volley-
ball court, game room, dog park
and small fitness center.
“This is a really interesting
story,” White said.
“ColRich is going to do a sig-
nificant renovation, and I mean
significant, to Sandpiper,” White
said.
“I believe they are going to
build a new clubhouse and
upgrade the interiors and the
exteriors,” he said.
Currently, he said, three units
are being used for the leasing
office and a small fitness center.
Those units will be incorpo-
rated back into the leasing pool,
he said.
The vacancy rate has been hov-
ering around 95 percent to 96 per-
cent, “like the rest of the market,”
White said.
And like just about every apart-
ment community that hits the
market, there was a lot of interest
from prospective buyers, he said.
“I think we ended up in the
range of 12 to 15 offers,” White
said.
Prospective buyers, he said,
liked that Sandpiper is not far
from the former Westminster
Mall redevelopment as well as
FasTracks improvements in the
area.
The property was built in 2001.
It is old enough to need
upgrades, but not like a 1970s
product that is completely out-
dated, he said.
“There is very high demand
for these value-add deals,”White
said.
“We are working with buyers
on several right now,” he said.
The key is that the return on the
improvements is far greater than
from the actual purchase, he said.
“I can’t quote you an exact
number on this deal. But in gen-
eral, if you spend, let's say, $5,000
on a rehab per unit and you get
another $100 or $150 per month
because of the renovation, that is
a far bigger return than on your
investment as far as what you
paid per door,” White said.
At the same time, given the
record rental rates, especially for
newer properties, the rehabbed
units still will be far belownewer,
nearby communities, he said.
“The willingness of renters to
pay the rent is what drives this,”
White said.
“Obviously, if the renters were
not willing to pay the higher rent,
this strategy wouldn't work,”
White said.
And with demand for apart-
ments expected to continue, both
in the short and long term, he
sees no backing off of this strat-
egy.
“The appeal is that even with
the higher rents after the rehab,
it is still going to be cheaper than
the brand-new building next
door.”s
JLL represented the seller of the Sandpiper in Westminster.
UCHealth chief medical offi-
cer. “I know our patients will
appreciate the convenience of
a brand-new facility while also
having access to the special-
ized care available within the
UCHealth system.”
UCHealth expects to break
ground on the $100 million to
$125 million facility in 2015
with a projected grand opening
in late 2016 or early 2017. The
location will be announced in
the next several weeks. s