Colorado Real Estate Journal - June 18, 2014

Salt Lake City group pays $34.35m for Springs apartments

by Jennifer Hayes

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A Salt Lake City-based group diversifying its portfolio acquired a Colorado Springs apartment property as part of its push to grow its Western holdings.

M&C Properties paid $34.35 million, or $149,348 per unit, for The Peaks at Woodmen Apartments.

“We are typically pretty conservative investors,” said Jed Millburn of M&C Properties.

“We like the long life remaining in the asset and its location in a good submarket in Colorado Springs. We felt we acquired The Peaks at Woodmen at a good price.” The acquisition is the first of an anticipated 600 to 700 units M&C Properties is looking to purchase in the Denver and Colorado Springs markets in the next one to two years. Typically, it acquires Class A to B-plus properties in Western markets.

M&C Properties also owns the Preserve at City Center in Aurora.

Located at 6750 Alpine Currant View, the 230-unit community, constructed in 2012, features “some of the best views in Colorado Springs,” noted CBRE’s David Potarf.

“The property commands huge view premiums,” added Potarf, who explained its location high on a hill near W o o d m e n Road and Union Boulevard affords views of Pikes Peak and the Garden of the Gods.

Potarf, along with Dan Woodward and Matt Barnett of CBRE, represented the seller, Talos Holdings, a local developer, in the transaction.

The one-, two- and three-bedroom apartments at The Peaks at Woodmen include vaulted ceilings, stainless steel appliances, walk-in closets, ceiling fans, tankless water heaters, washers and dryers, 9-foot ceilings, granite counter tops and Energy Starrated appliances. The community features a resident lounge, heated seasonal swimming pool, fitness and wellness studio, selfservice car wash, outdoor lounge with a fire pit and gas grills, limited gate access, mountain bike rentals and a cyber café.

At the time of its sale, The Peaks at Woodmen was 94 percent occupied.

“Colorado Springs has done really well over the last year,” Potarf said of the state of the Southern Colorado city’s apartment market. “We’re seeing lots of interest in newer properties.

There have been some good sales of new properties in the market.”

Addendum

Hamilton Zanze, which recently sold the Spring Canyon apartment property in Colorado Springs, as reported in the May 21-June 3 issue of the Colorado Real Estate Journal, plans further dispositions of its Colorado portfolio.

The firm, which owns and operates 77 properties totaling 15,675 units across nine states, is looking to sell more Colorado assets to take advantage of favorable selling conditions, according to a spokeswoman for Hamilton Zanze.

The Spring Canyon community was one of the firm’s earliest transactions and was held for nearly 10 years. “The sale price and returns we were able to achieve speak to the strength of the submarket and quality of asset,” said Kurt Houtkooper, chief investment officer.

Hamilton Zanze, which purchased the property at 4510 Spring Canyon Heights in 2004 for just over $28 million, sold the 292-unit community for $40.5 million.

Other News

Pinewood Apartments LLC paid $2.15 million for a 52-unit apartment community in Colorado Springs.

The buyer acquired the community at 3105 E. Dale St. at a 7.5 percent cap rate.

JEB Partnership sold the property in a deal handled by Unique Apartment Group. The community was constructed in 1971.

Inge Wartian, a private investor from California, recently acquired the 14-unit Drakestone Townhomes.

The community sold for $899,000, or $64,214 per unit.

The acquisition is Wartian’s first purchase in the Colorado Springs market.

ARA Colorado’s Saul Levy and Kevin McKenna represented the seller, Scott Gray, a local private investor, in the transaction.

“Drakestone Townhomes provided a rare opportunity to acquire a property adjacent to a major community development.

The Ivywild School has sparked a community resurgence and Drakestone Townhomes could be the next big change in the Ivywild area. What was once a vacant elementary school is now a bakery, brewery and community marketplace,” said Levy.

“The buyers will be able to benefit from the redevelopment’s momentum next door and attract a new resident demographic,” he continued. “The area is changing and will become a key destination for young professionals. The Ivywild School has been open less than a year, so there is still a lot of room on market rents for Drakestone.

The sellers were able to achieve a great price and the buyers still have a lot of upside in the rapidly improving area.” Built in 1962, Drakestone includes private entrances, fully enclosed backyards and two-story, townhome-style floor plans.

Lite Network recently acquired a 4,750-sf office property at 3925 Centennial Blvd. in Colorado Springs.

The nonprofit paid $410,000 for the building, sold by Great Western Bank. Randy Miller of CBRE represented the buyer. Andrew Oyler of Quantum Commercial Group Inc. represented the seller.