Colorado Real Estate Journal - December 17, 2014
A Boston-based company paid almost $100 million for the Sonoma Resorts at Saddle Rock I and II, one of the latest deals that illustrate the strength of the apartment market near the Denver Tech Center. Records show that Eaton Vance paid $99.87 million for the 604-unit community at 21904 E. Ontario Drive, just off Arapahoe Road, in southeast Aurora. That equates to $165,356 per unit. The sellers were the Bascom Group of Irvine, California, and GE Capital Real Estate. Fairfield Residential originally built Sonoma Resort as two separate properties in 2001 and 2002. Originally, the two adjacent garden-style Fairfield communities, on a total of 19.45 acres, were called Stonebriar at Saddle Rock and Greenbriar. The now-combined property is about 10 minutes east of the tech center. “There was a tremendous amount of interest in this property,” said Denver-based Jordan Robbins, who represented Bascom in the sale along with fellow HFF broker Jeff Haag. HFF real estate analyst Jared Buffington and Sean Deasy, an associate director in HFF’s Irvine’s office, also were part of the selling team. “I think we received 11 or 12 offers for it,” Robbins said. “Mostly, they were institutional investors and some local groups with institutional partners also were interested in buying it,” Robbins said. One of the big selling points was the location and the nearby demographics, he said. “The demographics are huge,” Robbins said. “It is an area with very high home values, and of course, it is close to a huge e m p l o y ment center, with its proximity to the tech center,” Robbins said. Few new apartment communities are being constructed in the immediate area, he said. “There is very little new competition within proximity, resulting in significant rent growth over the last 12 months, which should continue for the foreseeable future,” Robbins said. Also, the age of the community is a sweet spot for investors, he said. “Buyers look at product built in the early 2000s and see it as a value-add opportunity,” Robbins said. That was certainly the case in this purchase, he said. “They absolutely bought it below replacement cost,” Robbins said. While some of the prospective buyers had plans in place to upgrade the entire community, he said he thinks the new owners will upgrade units as needed. The community was 97 percent leased at the time of the sale. “Bascom did a very good job of running it and left it in very good shape,” he said. “I think the new group will do some upgrades, which will really be driven by the market,” Robbins said. He said Bascom seamlessly merged the two communities. Because they began life as two separate communities, the combined community has two fitness centers and two resortstyle clubhouses and pools. In total, the community includes 30 two- and threestory buildings with one-, twoand three-bedroom units averaging 923 square feet each.