Colorado Real Estate Journal - May 7, 2014
An investor with a good grasp of the Northern Colorado market paid a record price for the newest conventional apartment community in Fort Collins. Boulder-based Mountain View Capital LLC paid $39 million, or a record $162,500 per unit, for the Terra Vida Apartment Homes, a 240-unit property on the Harmony Road corridor at 3707 Precision Drive. Milestone Apartment Developers, which completed the apartments in late 2012, was the seller. “It’s really a groundbreaking price for that market. What made that possible is that market is just on fire. It is really, really strong,” said Doug Andrews of ARA, who handled the sale with ARA’s Terrance Hunt, Jeff Hawks, Doug Andrews and Shane Ozment. Hunt said there was good activity for the apartments, although probably not as much as there would have been for a newer property in Denver since some investors still view Northern Colorado as a tertiary market. “This is someone from Boulder who understood exactly what’s going on,” said Hunt. Likewise, most out-of-state offers came from investors who already owned property in the region, whose apartment vacancy rate is under 3 percent. Located close to Interstate 25 on Fort Collins’ main retail and employment corridor, Terra Vida is adjacent to the Banner Fort Collins Medical Center, which will open in 2015. The apartments were approximately 94 percent occupied at the time of the sale. Although most buyers prefer conventional financing over U.S. Department of Housing and Urban Development loan assumptions because it is less cumbersome and they can get competitive rates and higher leverage, buyer Jeff Sanders of Mountain View Capital assumed a 221(d)(4) loan on the property, as he did with his recent acquisition of the Block 32 at RiNo apartments in Denver. “He got it done within three months, which is the fastest we’ve ever seen,” said Hunt. Mountain View exchanged into the property after recently selling the Uptown Broadway in Boulder for a record per-unit price in that market: $231,897. Terra Vida’s developer is big on fitness facilities. The community has a 5,400-square-foot clubhouse with a 2,000-sf state-of-the-art, 24-hour health club, a five-lane junior Olympic-size pool and a hot tub. It is connected to a citywide bike trail system and has public tennis and basketball courts across the street. The property also has barbecue grills, picnic areas, an entertainment area with billiards, a conference room, heated, year-round pet washing station and a beer tap in the clubhouse, which has seating areas with wireless Internet. Individual apartments, which average 894 sf, feature full-size, stackable washers and dryers, built-in computer desks, glass top ranges, kitchen islands, private balconies or patios, walk-in closets in every bedroom and oversized windows. The property also offers full-size single car garages, master suites in two-bedroom units and, in select units, full-size balconies with unobstructed mountain views. Terra Vida Apartment Homes is evenly divided between one bedroom, one-bath units of 725 and 790 sf and two-bedroom, two-bath units with 985 and 1,076 sf.