August 5-August 18, 2015 —
COLORADO REAL ESTATE JOURNAL
— Page 35
Multifamily
by John Rebchook
CWS Capital Partners added to
its Denver-area portfolio by pay-
ing $72.5 million for the 301-unit
Yards at Denargo Market at 2797
WewattaWay in RiNo, in the big-
gest apartment community sale
so far this year in the increasingly
popular River North neighbor-
hood.
The sale equates to $240,864 per
unit and $286.64 per square foot.
CWS bought it from the devel-
oper, Austin-based Cypress
Real Estate Advisors. CWS has
renamed the five-story building
as the Marq at RiNo.
“It’s practically the only one in
RiNo to sell,” said Terrance Hunt,
who sold the Yards at Denargo
with fellow ARA Newmark bro-
kers Jeff Hawks, Doug Andrews
and Shane Ozment.
The only other large RiNo
apartment sale was Block 32 at
RiNo, which last year sold for $43
million, Hunt said.
“So this is the biggest,” Hunt
said.
He said they received five or
six offers for the Yards at Denargo
Market, which is fewer than they
often receive for urban Denver
communities.
“Just like anything in Denver,
there was a lot of interest in it,”
Hunt said.
“But for some out-of-state insti-
tutional investors, RiNo is still a
little hard for them to get their
arms around,” Hunt said.
It is much easier for out-of-
state investors to understand the
Union Station area, for example,
than RiNo.
“If you look at RiNo from afar,
it’s a little hard to understand
just how quickly that area north
of downtown is evolving,” Hunt
said.
One group, though, that is
welcoming the new additions to
RiNo are young, professional mil-
lennials.
“Renters love RiNo,” Hunt
said. “They love that it is only
minutes fromdowntown, but still
it kind of a gritty neighborhood.
The grittiness is part of RiNo’s
appeal.”
RiNo apartments also rent for
less than new communities by
Union Station or Lower High-
land, he noted.
Cypress, which is building a
300-unit project next door to the
former Yards at Denargo, decided
it was a good time to sell and take
advantage of the strong market,
he said.
“Their cost basis was really low,
because they were the first ones
in the neighborhood and they got
a great price for their property,”
he said.
Simpson Housing and oth-
ers also are planning apartment
communities in RiNo, he noted.
Some developments, however,
have been delayed because of the
shortage of subcontractors, espe-
cially framers, he said.
Hunt said he isn’t worried
about overbuilding in RiNo as
in other infill, Denver neighbor-
hoods.
“If you based everything on
historic facts of absorption, it
would be alarming,” Hunt said.
“But the demand factor right
now in Denver is so great that
everyone has been surprised,”
Hunt said.
“The supply is being absorbed
faster than anyone had predicted
and at higher rates,” he said.
A lot of the new product in and
around Denver, and to a lesser
extent in the Denver Tech Center,
will come on line this year and
in 2016.
Maybe that is when the other
shoe will drop and occupancies
and rents will fall.
But maybe not.
“It is really hard to say,” Hunt
said. “People were projecting a
big slowdown in 2014 and as we
entered 2015, but it didn’t hap-
pen. Even if you look at the U.S.
36 corridor in Broomfield, a ton of
new stuff opened and units have
never leased faster or at higher
prices,” he said.
Meanwhile, with the purchase
in RiNo, CWS owns more than
1,000 apartment units in the Den-
ver area.
“They are very bullish on Den-
ver,” Hunt said. “Most notably,
they own theMarquis at the Park-
way, which is right off Speer by
the King Soopers,” nearWest Col-
fax Avenue.
The Marquis at the Parkway, at
1170 Galapago St., is its biggest
single holding with 460 units.
It also owns the 283-unit Mar-
quis at Town Centre at 1001 E.
First Ave. in Broomfield. The
Marq at Ridgegate, which ARA
Newmark recently sold to them,
has 243 units.
Other News
n
In another deal handled by
the
ARA Newmark
team of
Ter-
rance Hunt, Jeff Hawks, Doug
Andrews
and
Shane Ozment,
Steadfast Apartment REIT
paid
a total of $91 million for two
apartment communities.
Steadfast paid $53.4 million for
the 360-unit Hearthstone at City
Center at 932 S. Helena Way in
Aurora and $37.6 for the 303-unit
Bella Terra at City Center at 15400
E. Evans Ave., also in Aurora.
The Hearthstone sale equates
to $148,333 per unit and $169.71
per square foot.
The Bella Terra sale equates
to $124,092 per unit and $183.75
per sf.
“Denver and its surrounding
cities are experiencing solid eco-
nomic fundamentals compared
to other national cities,” said
Ella
Neyland,
president of Steadfast
Apartment REIT.
“This includes employment,
population growth and renter
demand,” he continued. “Strong
employment is a key driver in
Steadfast’s acquisition strategy
and Denver’s unemployment
rate fits into Steadfast’s target
markets when acquiring apart-
ment communities.
“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 foreseeable
future,” Neyland said.
Bella Terra at City Center was
constructed in 1980 on nearly
10.6 acres. It includes 15 two- and
three-story garden-style build-
CWS recently bought and renamed the Yards at Denargo Market.
Beartrax is a general contractor with specific focus
on interior and exterior re-development of
multi-family properties.
