June 15-July 5, 2016 —
COLORADO REAL ESTATE JOURNAL
— Page 21
Colorado Springs/So. Front Range
by Jennifer Hayes
Vukota Capital Management
continues to grow its Colorado
Springs apartment portfolio,
most recently with its acquisition
of the 216-unit Stratus commu-
nity.
The privately held investment
firm paid a reported $17.38 mil-
lion, or $80,439 per unit, for the
community at 4255Airport Road.
In a release regarding the sale,
VCM noted that the purchase
price is “attractive and is at a
40 percent-plus discount to esti-
mated replacement cost, creating
a competitive barrier to entry.”
VCM also noted that the acquisi-
tion presents a significant value-
add opportunity to increase cash
flows given that market rents
based on recent lease renewals
are more than 10 percent greater
than current average rents.
The two-story, garden-style
property was sold by FPAMulti-
familyLLC,whichhadpurchased
the property in 2013 for $9.05 mil-
lion. FPA spent more than $2.5
million in capital improvements
to the 1975 apartment commu-
nity, including renovations to the
clubhouse, pool and fitness area,
landscaping,
signage and
some unit ren-
ovations.
In addition,
the previous
owner added
double-pane
w i n d o w s ,
new siding
and new boil-
ers,
noted
Kevin McKenna of ARA New-
mark. “There has been a lot of
capital spent on the property in
the last six to eight years,” added
McKenna, who handled the sale
with ARANewmark’s Saul Levy.
“The buyer stepped into, more
or less, a turnkey kind of asset
in which the seller had already
done a lot of the heavy lifting
and was now seeing significant
rent increases,” said McKenna.
VCM, however, plans to continue
the upgrade program started at
Stratus and to build upon its loca-
tion near the Colorado Springs
Airport.
“Stratus is located in a rapidly
improving area,” McKenna said
of its southeast location. “There
is a lot of positive economic job
growth in that area with signifi-
cant job announcements, includ-
ing SierraNevada, which is going
to add 2,100 jobs near there,
FedEx just built a distribution
facility down there and defense
contractors are growing. It’s an
area getting a lot of attention.”
Stratus comprises 90 percent
two- and three-bedroom units
and was around 95 percent
occupied at the time of sale. The
community also features a resi-
dent lounge with Wi-Fi, laun-
dry facilities, a picnic area and
courtyards.
The transaction was fund-
ed by investments of equity
capital from VCM and other
accredited investors, as well as
mortgage financing from Fred-
die Mac.
With the acquisition, VCM
holdings total 11 properties in
Colorado. Currently, VCM and
its subsidiaries own and/or
manage 2,500-plus apartment
units. VCM’s typical property
acquisitions range between 100
and 500 units, or $5 million to
$50 million in purchase price.
VCM’s multifamily strategy is
to acquire properties in second-
ary and tertiary markets below
replacement cost in growing
supply constrained communi-
ties where, over the long term,
rents are expected to increase
above the rate of inflation.
Other News
n
Podoll & Associates LLC
recently acquired an 8.69-acre
site in Colorado Springs for
$1.14 million.
The land was rezoned to
accommodate a used car deal-
ership, said
Mark Useman
of
Colorado Springs Commer-
cial, a Cushman & Wakefield
Alliance,
who represented sell-
er
FN Limited Liability Co.
The car dealership is expect-
ed to begin work on the prop-
erty in a year.
n
Intelligent Software Solu-
tions Inc.
recently renewed its
office lease for 94,806 square
feet in Colorado Springs.
It renewed its lease at Tech
Center I, located at 5450 Tech
Center Drive.
Michael Palmer
of
Quantum
Commercial Group Inc.
repre-
sented the U.S. Department of
Defense tenant.
MAC Colora-
do Springs LLC
is the landlord.
n
Time Warner Cable Pacific
West LLC
extended its 93,077-
sf office lease at 2221 E. Bijou
St. in Colorado Springs.
Brian
Wagner,
Mark
O’Donnell
and
Kent Mau
of
Newmark Grubb Knight
Frank
represented the landlord,
CSMC 2006-C5 Bijou Street
LLC. JLL’s Dan McGowan,
Mike Rooks
and
Tom Lepry
represented the tenant.
s
Stratus underwent a number of capital improvements, including work to its clubhouse and pool.
Kevin McKenna
