Colorado Real Estate Journal - November 19, 2014

Canadian REIT pays $40.5m for apartments

by John Rebchook


Milestone Apartments, a real estate investment trust based in Toronto, recently paid $40.5 million for the 221-unit Village at Legacy Ridge in Westminster.

The community at 3850 W. 112th Ave. was sold by Denver-based Corum Real Estate Group. The sale equates to $183,326 per unit. Legacy Ridge was built in 2001 on a 12.3-acre site and currently is about 97 percent occupied.

The average monthly rent is about $1,200 per unit. The average rents are higher than the average rents in the REIT’s portfolio, according to Milestone.

One reason the rents are higher is because the Village at Legacy Ridge has a higher proportion of two- and threebedroom units than found in its overall portfolio, according to Milestone.

Milestone was drawn to the property because of its proximity to both Boulder and downtown Denver.

As part of the purchase, Milestone assumed a fixed-rate mortgage of about $23.6 million at an interest rate of 3 percent.

The loan is fully amortized on a 35-year schedule maturing in October 2046.

The financing terms decrease the REIT’s weighted average interest rate and extend the maturity of its mortgage note obligations, Milestone said.

The balance of the purchase price will be funded using proceeds raised from the REIT's recently completed $115.1 million (in Canadian dollars) equity offering.

The garden-style, two- and three-story walk-up has consistently boasted an occupancy rate average of 99 percent.

The site provides direct access to a golf course and an extensive trail network.

Corum, on its website, described its investment strategy for the community as “build-to-core,” in which it acquired the land and developed it with an institutional partner with the idea of holding it for the long term.

Corum recapitalized the loan in 2006, with investors exiting with a 14 percent-plus internal rate of return.

In total, Corum recapitalized the property three times, with all investors exiting with more than a 12 percent IRR.

In 2012, solar panels were added that power the common areas. They were partially funded with tax credits.

Pat Stucker, an apartment broker with JLL, wasn’t involved in the sale, but has sold numerous apartment communities in the area and is familiar with the development.

“Investors really like that whole Westminster corridor,” Stucker said.

“It is close to downtown Denver, as well as Boulder, so it is a great place to live if one person works downtown and the other in Boulder,” he said.

Other News



San Francisco-based Jackson Square Properties paid $26.25 million for the 230-unit Rockledge Bear Valley apartment community at 3550 S.

Kendall St. in southwest Denver. The seller was a joint venture of ColRich Multifamily and Harbert Management Corp.

The sale price equates to $114,130 per unit.

The three-story, 10-building community was renovated from 2012 to 2014.

Jordan Robbins, Jeffrey Haag and Jared Buffington of HFF represented the sellers.

An unidentified buyer paid $3.8 million, or $95,000 per unit, for a 40-unit apartment building at 285 S. Jay St. in Lakewood. The building was constructed in 1966 and sold for a 7 percent cap rate.

The buyer plans to own it for the long term. The transaction was handled by the Unique Apartment Group.

An unidentified buyer paid $1.76 million, or $110,000 per unit, for the 16-unit apartment building at 176 S. Sherman St. in Denver. The building was constructed in 1958.

Jeff Johnson and Greg Breslau, with the Johnson Ritter Team at Pinnacle Real Estate Advisors LLC, represented both the seller and the buyer in the transaction.

“There is a lot of upside potential for the buyer by updating the units over time and the location is great,” Johnson said.

An unidentified buyer paid $1.49 million, or $93,438 per unit, for a 16-unit apartment building at 901-931 W.

Prentice Ave. in Littleton. The building was constructed in 1978 and sold for a 7.18 percent cap rate. The transaction was handled by the Unique Apartment Group.

An unidentified buyer paid $690,000, or $98,571 per unit, for a seven-unit apartment building at 3620-3632 Ingalls St., Wheat Ridge. The building sold at a 7 percent cap rate. The buyer plans to hold the property for the long term, according to the Unique Apartment Group, which brokered the sale.

An unidentified buyer paid $450,000 for the fourunit Iris Garden Apartments at 9842-9856 W. 32nd Ave. in Lakewood. The sale equates to $112,500 per unit and $117.34 per square foot. The property was built in 1971.

Josh Newell and Zane Wells of Pinnacle Real Estate Advisors LLC represented the seller in the transaction.

how do you get hiv aids what causes hiv/aids facts on aids