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COLORADO REAL ESTATE JOURNAL
— September 21-October 4, 2016
by John Rebchook
Jackson Square Partners
recently paid $166.75 million for
two Denver area apartment com-
munities in the latest sign of how
bullish the San Francisco-based
company is on the local multi-
family market.
It bought both communities
from Fairfield Residential.
In by far the bigger of the two
acquisitions, it paid $98.5 million
for the Fairfield Legend Oaks,
a 488-unit community built in
1997 at 1250 S. Dayton Court in
Aurora.
In the other deal, it paid $68.25
million for the 300-unit Skye
Crest at 7846 W. Mansfield Park-
way in Lakewood.
With these two acquisitions,
and including three communi-
ties it owns in a partnership with
another San Francisco-based
company, Jackson now owns
4,398 apartment units in the
metro area.
That makes it the second-larg-
est owner of apartment units in
the Denver area.
Legend Oaks is Jackson’s
single-largest acquisition in the
Denver area, both in terms of
the number of units and the pur-
chase price.
In an interesting twist, the com-
munity was initially developed
by Fairfield and had sold mul-
tiple times before Fairfield repur-
chased it, with different partners,
in 2011 for $47.1 million.
David Martin and Pam Koster
of Moran & Co. represented Fair-
field.
Moran &Co. first came to Den-
ver to help raise financing to
develop the community, Koster
said.
Fairfield sold the property to
Jackson Square for 72.56 percent
more than it paid.
However, that does not include
the cost of the extensive upgrades
to the community by Fairfield.
“We saw a little bit less interest
in this property for two reasons:
First, it was a close to $100 mil-
lion sale, which is a big deal in
and of itself, but it is really a big
deal for this vintage of a prop-
erty,” Koster said.
The second reason is that Fair-
field had renovated 85 percent of
the units, so it had less interest
to value-add buyers than would
have been typical.
“Only 73 of the units had not
been renovated,” Koster said.
“So there was not a ton of meat
on the bone,” she said.
A smaller value-add deal in
the area in the $50 million range
would have drawn far more
bids, she said.
“That’s everyone’s sweet
spot,” Koster said.
However, Jackson Square was
astute in realizing the value in
the community, given its prox-
imity to the Denver Tech Center
and Cherry Creek.
“Residents here don’t pay the
$3 per square foot like in the
new product in Cherry Creek,”
she said.
And with the typical rent in
the community around $1.40 per
sf, it also is less than in the tech
center, where rents are around $2
per sf, she said.
It also is close to the Anschutz
Medical Center and the giant
Amazon warehouse.
She isn’t surprised that Jack-
son Square had the winning bid,
beating out five competitors.
“They are very bullish on Den-
ver and have become one of our
largest landlords,” Koster said.
Jackson Square paid $90,278
per door, far below the replace-
ment cost.
Jackson Square paid $227,500
per unit for the Skye Crest.
Fairfield sold it for about 57
percent more than the $43.5 mil-
lion it paid for it in 2013.
Once again, Fairfield had reno-
vated most of the units before
the sale.
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Jackson Square paid $98.5 million for Legend Oak.
