Colorado Real Estate Journal - July 16, 2014

Pinnacle Apartments sell for $36.5 million to JRK

by Jennifer Hayes

---

A Los Angeles-based buyer is ready to write the next chapter in The Pinnacle Apartments.

JRK Birchmont Advisors paid $36.5 million to Resident Management Systems for the 300- unit community in northeast Colorado Springs, according to public records.

“We liked the location and we liked the upside story it offered,” said Brett Johnson, director of acquisitions for JRK Investors.

The purchase represents JRK’s first acquisition in the Colorado Springs market, however, it is looking to add additional multifamily properties across the state to its portfolio, added Johnson.

JRK Investors is part of JRK Property Holdings, which owns numerous apartment properties in metro Denver and Northern Colorado, including Briargate on Main in Parker, Pines at Castle Rock and Waterford Place in Loveland.

JRK plans to renovate and take care of deferred maintenance at The Pinnacle Apartments, which offered a “significant” amount of value-add upside, he added.

Work is anticipated to start in the next six to 12 months.

Completed in 2005, The Pinnacle Apartments is located at 6416 Honey Grove. The community, which offers, one-, twoand three-bedroom apartments, includes a clubhouse, pool, spa, tanning bed and playground as well as unit amenities such as a patio/balcony, gas fireplace, and 9-foot ceilings in some units.

“We had quite a few offers on the property,” said CBRE’s David Potarf, who represented the seller with CBRE’s Dan Woodward and Matt Barnett.

“Investors are seeing the value in the price per pound you get in Colorado Springs.” At the time of sale, The Pinnacle Apartments was 94 percent occupied.

Other News

Shefflin Investments LLC paid $5.9 million, or $35,119 per unit, for the Hill Park apartments in Colorado Springs.

The Montecito, Calif.-based real estate company acquired the 95 percent-occupied property from Hill Park Associates, a California-based private real estate investor.

“Hill Park presented one of the best value-add opportunities for this market in recent years,” said Ken Greene of ARA Colorado. “The property was acquired for a reasonable price and the buyer has budgeted for substantial renovations. Several properties in this neighborhood have seen radical transformations and more investors are beginning to take notice. Hill Park is perfectly positioned for a similar upgrade, but also has a distinct advantage over the competition with some of the largest floor plans in this submarket and one of the few properties with a strong concentration of three-bedroom units.” Greene, along with ARA Colorado’s Kevin McKenna and Saul Levy, represented the seller of the 168-unit community.

“We saw a lot of interest in the property and offers were competitive. I think investors are realizing that the number of true value-add properties is dwindling. Over the past few years, many older vintage properties have traded and already undergone renovation. As a result, few opportunities are left. We are seeing a lot of urgency from value-add-focused investors,” added Levy.

Constructed in 1972, the property is located at 310 N. Murray Blvd. Apartments average 767 square feet and comprise primarily (62 percent) two-bedroom units. Hill Park also features one- and three-bedroom units and a “low-lot” density at 20.8 units per acre.