July 15-August 4, 2015 —
COLORADO REAL ESTATE JOURNAL
— Page 35
Multifamily
by John Rebchook
Seagate Properties, based in
San Rafael, California, recently
paid $65 million for the 318-
unit Environs apartment com-
munity in Westminster.
“We had a ton of offers. We
had 15-plus offers,” said David
Potarf, who handled the sale
with fellow CBRE team mem-
bers Dan Woodward, Matt Bar-
nett and Brady O’Donnell.
O'Donnell of CBRE's Debt
and Structured Finance team
financed the property, provid-
ing a sub-4 percent interest rate
for a 10-year loan with five
years of interest only.
The Environs is not your
typical suburban, garden-style
apartment community, accord-
ing to Potarf.
“This is a really unique prop-
erty,” Potarf said. “It is kind
of a mixed-use property, with
a wide variety of styles. It has
condo-style apartments, patio-
home style and single-family
home types of apartments. It
is really a one-of-a-kind prop-
erty,” he said.
The breakdown, by apart-
ment style, is 110 apartments,
71 patio homes, 94 townhomes
and 43 single-family homes.
The Environs is more attrac-
tive to families, given the large
number of residential-style
units, Potarf said.
Indeed, an exit strategy could
be to eventually convert some
or all of the units to for-sale
properties.
“The market for single-family
homes in the Denver market
area has been very active,”
CBRE noted in its marketing
material for the Environs.
“With a limited supply of
townhomes, condos and sin-
gle-family homes in the area, a
staged conversion is feasible,”
according to the CBRE team.
“A buyer could purchase the
property and sell off whichever
home type is in most demand at
the time. The added advantage
to owning one of the Environs
homes could be access to the
community amenities,” such as
the swimming pool and recre-
ation center.
The community sits on 33
acres at 3323 W. 96th Circle.
It was built in 1984.
Given its age, it also repre-
sents a value-add opportunity,
Potarf said.
“Absolutely,” Potarf said.
“The seller had upgraded some
of the units, but there are a
number of them that can still be
rehabbed.”
Investors are drawn to value-
add deals because those typi-
cally provide a better return
on their investments than the
actual purchase.
Records show that the seller,
San Francisco-based Hamilton
Zanze and Co., paid $39.65 mil-
lion, or $142,686 per unit and
$124.69 per square foot, in 2007.
Seagate paid the equivalent
of $204,403 and $169.42 per sf.
That equates to a 63.9 percent
increase from its original sales
price.
Seagate and other prospec-
tive buyers also liked the loca-
tion of Environs, Potarf said.
“The location of Westmin-
ster is a strong address,” Potarf
said. “Usually, not that much
comes on the market up there,
so when a property does, it
always generates a lot of inter-
est.
“Westminster is really a great
location, because it is kind of
halfway between Denver and
Boulder.”
Other News
n
Steadfast Apartment
REIT,
based in Irvine, Califor-
nia, recently paid a total of $91
million for the 304-unit Bella
Terra at City Center and the
360-unit Hearthstone at City
Center. Both are in Aurora.
Steadfast Apartment REIT
owns three apartment commu-
nities in Colorado, with a total
of 916 units.
“Denver and its surround-
ing cities are experiencing solid
economic fundamentals com-
pared to other national cities,”
said
Ella Neyland,
president of
Steadfast Apartment REIT.
“This includes employment,
population growth and renter
demand,” Neyland continued.
“Strong employment is a key
driver in Steadfast’s acquisition
strategy, and Denver’s unem-
ployment rate fits into Stead-
fast’s target markets when
acquiring apartment communi-
ties,” according to Neyland.
“Additionally, limited new
apartment construction in the
Aurora submarket should keep
demand healthy for Bella Terra
at City Center and Hearthstone
at City Center for the foresee-
able future.”
Bella Terra Center was built
in 1980 on almost 10.6 acres.
The community has 15 two-
and three-story garden-style
buildings, with studio, one-
and two-bedroom homes aver-
aging 676 square feet with an
average monthly rent of $917.
Amenities include a club-
house, fitness center, swimming
pool with spa, business center,
outdoor basketball court, play-
ground and a picnic area with
barbecue stations. Bella Terra
at City Center is currently 98
percent occupied.
Hearthstone at City Center is
two miles from Bella Terra and
was built in 1984.
Hearthstone has one-, two-
and three-bedroom apartments
in five different layouts ranging
from 720 to 1,501 sf. Average in-
place monthly rents are $1,038.
Amenities include a fitness cen-
ter, swimming pool, business
center and a playground with a
basketball court.
Both properties will undergo
a moderate revitalization strat-
egy to unit interiors and exte-
rior common areas.
Bella Terra at City Center
and Hearthstone at City Center
also benefit because they are
close to the Denver Tech Center
business corridor, which has
more than 40 million sf of office
space.
They also are close to the 578-
acre Anschutz Medical Cam-
pus. Additionally, the commu-
nities will benefit from Fas-
Track rail lines that are sched-
uled to open next year that will
link Aurora to key regional rail
routes, including a train to the
Denver International Airport.
n
An unidentified buyer paid
$6.6 million for the 57-unit Lyn-
newood Apartments at 5579 S.
Windermere St. in Littleton.
The sale price equates to
$115,789 per unit and $144.52 per
sf.
The building was constructed
in 1972.
Josh Newell,
a senior adviser
at
Pinnacle Real Estate Advisors
LLC,
represented the local buyer
and seller in the transaction.
n
An unidentified buyer
recently paid about $2.7 million,
or $179,266 per unit, for a 15-unit
apartment building at 2421 S.
Gaylord St. in Denver.
Matt Lewallen
and
Kevin Cal-
ame,
senior advisers at
Pinnacle
Real Estate Advisors LLC,
rep-
resented the seller in the transac-
tion.
“The buyer will continue the
renovations the seller began and
looks forward to moving more
rents to market as the units turn,"
Lewallen said.
n
An unidentified buyer paid
$1.24 million for two apartment
buildings at 1617 Alton St. and
15204 E. Eighth Ave. in Aurora.
Joe Hornstein
and
Scott Fet-
ter,
senior advisers at
Pinnacle
Real Estate Advisors,
represent-
ed the seller in the transaction.
“This was a portfolio purchase
of two low-income housing prop-
erties in Aurora,” Fetter said.
“The seller enlisted us to find
a buyer who would continue the
Community Housing Partner’s
mission of providing affordable
housing to families in Aurora,”
Fetter continued.
“The seller found a great buyer
and is excited to see the proper-
ties go to a great owner with
experience in low-income hous-
ing,” he said.
n
An unidentified buyer paid
$485,000 for a six-unit apartment
building at 3340 S. Canosa Court
in Englewood. That equates to
$80,883 per unit and $159.75 per
sf. The property was constructed
in 1951.
Josh Newell,
a senior adviser
at
Pinnacle Real Estate Advisors
LLC,
represented the local seller
in the transaction.
s
The Environs in Westminster recently sold.
DenverMayorMichael B.Han-
cock was at the groundbreak-
ing ceremony. He even took the
controls of a giant earth-moving
machine and dumped a truck-
load of dirt, instead of the typical
ceremonial tossing of dirt from a
shovel.
Following the ceremony, Han-
cock said the units are the right
development at the right place at
the right time.
He also said he is thrilled that
the project will create more than
1,000 construction jobs. The tow-
ers are being constructed by
Swinerton Builders.
“We are delighted that the
Country Club Towers II project
will benefit the local economy by
training and developing the next
generation of Denver’s work-
force, helping to fill the construc-
tion industry’s continuing need
for a skilledworkforce,”Hancock
said.
He said he knows that there
is a great deal of anti-growth
sentiment in Denver. However,
growth is coming and people
will continue to want to live in
Denver, which will require hous-
ing in all price ranges, he said.
As (City Councilman) Chris
Nevitt so eloquently put it (at the
groundbreaking ceremony), “A
million people are coming here
over the next 20 years and they
will need a place to live,” Han-
cock said.
He said he realizes not every-
one can afford to live in these
luxury towers, or other high-end
apartment units being built in
Denver.
“I just came from a meeting
in San Francisco with 350 other
mayors,” Hancock said.
“Every mayor, in every major
city, is concerned about afford-
able housing,” Hancock said.
“Affordable housing is some-
thing Denver is grappling with
and must deal with. But we are
not alone,” Hancock said.
That said, Denver also needs
luxury rental units, he said.
“We need a diversified housing
stock, both for sale and rental,
in all price ranges,” said Han-
cock, who earlier had unsuccess-
fully lobbied state legislators to
amend the construction defect
laws, which have made it all
but impossible for developers to
build lower-priced, market-rate
condos in Denver.
Country Club Towers II will fill
a need for those seeking luxury
living, he said.
“This is appropriate housing at
this location,” the mayor added.
“I support what Pat Broe is doing
here.”
The new towers, when they
open between May 2017 and
August 2017, will not only raise
the bar when compared to the
Samantha V. Simmons
Mayor Hancock gets off a bulldozer, as Sean Broe watches.
