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May 6-May 19, 2015 — COLORADO REAL ESTATE JOURNAL — Page 5
Greater Denver
by John Rebchook
Eric Tupler and his team in the
Denver office of HFF recently
arranged a $40 million loan on
behalf of J.P. MorganAsset Man-
agement for the recently opened
Broadstone Gardens at Cherry
Creek.
The Class A community,
which is LEED Gold certified,
has 191 units.
The community, at 225 S. Har-
rison St., was completed late last
year by Alliance Residential.
Originally, it was to be part of a
for-sale condo project by veteran
Denver developer Mickey Zep-
pelin. When the recession hit,
and the condo
market’s bot-
tom fell out,
Zeppelin sold
the property
to Alliance.
“ O r i g i -
nally, it was
a joint ven-
ture between
Alliance and
J.P. Morgan,”
Tupler said.
“But now J.P. Morgan owns it
outright,” Tupler said.
He said he believes J.P. Mor-
gan also paid off the construc-
tion loan when it bought out
Alliance.
“J.P. Morgan owned it free and
clear; it was unencumbered,”
Tupler said.
Typically, when develop-
ers form a joint venture with
an institutional partner like J.P.
Morgan, there is language in the
agreement that allows one part-
ner to buy the other out.
“That is pretty standard,”
Tupler said.
Tupler, whose team included
Leon McBroom in Denver and
two HFF officials fromNewYork
City, placed the loan with Wells
Fargo.
“There was a huge amount
of interest in this loan, not only
from banks, but from life insur-
ance companies too,” Tupler
said.
J.P. Morgan wanted the flex-
ibility and short-term financing
that typically only banks can
provide, he said.
The loan not only has a very
low interest rate, but if J.P. Mor-
gan decided to sell it, after 2 ½
years, there is no prepayment
penalty, he said.
Even if J.P. Morgan, which has
more than $82 billion in assets
under management worldwide,
decides to sell it earlier, the pen-
alty is much smaller than a typi-
cal yield maintenance, he said.
J.P. Morgan is so bullish on the
community, it sought the financ-
ing even before Broadstone Gar-
dens was fully stabilized.
“A lot of times, owners want
the property to be a bit more
seasoned,” before going out to
the market, to get the best terms
possible, Tupler said.
In this case, Broadstone Gar-
dens had everything going for it,
Tupler said.
“It really was the perfect align-
ment of factors,” Tupler said.
“It’s a fantastic property in
a fantastic submarket,” Tupler
said. “Cherry Creek is probably
the hottest submarket in Den-
ver for apartments. Youʼre walk-
ing distance to the Cherry Creek
shopping center and it is an easy
drive to either downtown or the
Denver Tech Center. The house-
hold incomes and demographics
in the area are incredible.”
Also, Alliance did a great job in
developing it, he said.
“It was well designed,” Tupler
said. “It even includes some
townhome-style units. It’s built
to the standards of the condos
that Mickey (Zeppelin) planned.
In fact, if you look at an aerial
photo, you can see one of the
buildings on the property is a
condo tower that Mickey built.
The apartments and the condos
actually share a parking garage.”
In addition, there is the owner.
“J.P. Morgan is as financially as
strong as you get,” Tupler said.
“When you look at everything
going for it: great construction
and design; a fantastic location;
and a incredibly financially
strong owner, you really have
all of the elements for the type
of property that lenders dream
about.”s Broadstone Gardens at Cherry Creek recently opened.
Eric Tupler