Colorado Real Estate Journal - May 6, 2015
A fast and fierce hailstorm ripped through south Denver last September. “Probably the hardest-hit building in last year’s hailstorm was the PeakView Place” apartment community, said Terrance Hunt, a principal of the Denver office of ARA Newmark. “It looked like a war zone,” Hunt said. Siding was ripped off and windows were broken. “There was significant damage; I believe it was over $1 million,” Hunt said. While dealing with an insurance company is never anyone’s idea of a good time, what added another dimension to the damage done to this 296-unit apartment community at 9959 E. Peakview Ave. in Englewood is that Hunt and fellow ARA Newmark team members – Jeff Hawks, Doug Andrews, Shane Ozment, Anna Stevens and Amanda Meldrum - recently sold it, post-storm. The sales price wasn’t released, but records indicate it sold for $45.5 million. It was acquired by the San Diego-based ConAm Group. That sales price equates to $153,716 per unit. The storm damage did nothing to dampen investor interest in the community, which was built in 1979 and has been owned since 1982 by Greenwood Villagebased AIMCO. “We had 20 offers,” Hunt said. AIMCO allocated the insurance proceeds to ConAm, he said. Indeed, ConAm plans to invest $5.5 million into a renovation. The renovation will include constructing a new leasing office, new exterior siding, interior upgrades and enhancing common area and landscaping. “The level of improvement is justified, given that it has this great DTC location,” Hunt said. PeakView, if not the first apartment community in the tech center, was one of the earliest in the DTC, he said. ConAm and the other bidders loved its southeast location and that it is a true value-add property, Hunt said. It also didn’t hurt that the insurance company is picking up the tab for a portion of the renovations, he said. “It has this great location in what we call the Denver Tech Center submarket, which really runs from Meridian on the south and includes Inverness and all of the office properties and retailers from there all the way to I-225,” Hunt said. The DTC corridor has more than 40 million square feet of office space and 423,000 workers, according to ARA Newmark’s research. Within a three-mile radius, 83.1 percent of the adult population has a college degree and the average household income is $103,623, according to ARA Newmark’s research. PeakView Place also is in the Cherry Creek School District. At PeakView Place, 62 percent of the units have two or three bedrooms, making it wellpositioned for young families, according to Hunt. PeakView Place also is within walking distance of the Arapahoe at Village Center light-rail station. The apartment community also is minutes away from just about any retail or restaurant you could imagine, including Safeway, Target, Home Depot, Sprouts Farmers Market, Office Depot and a United Artists theater, just to mention a handful. It is about a five-minute drive from the Park Meadows Mall and the IKEA store, the ARA team pointed out in its marketing package. Rob Singh, ConAm’s president and chief investment officer, agreed that Peakview Place has a great location. “The property is located within one-half mile of a light-rail station and one mile of Interstate 25, which provides easy access to all employment centers, including downtown Denver,” Singh said. “We are pleased to acquire this attractive value-add opportunity in one of the strongest rental growth markets in the country,” Singh said. With this purchase, ConAm now owns 5,500 units in Colorado. Hunt said that ARA had listed the property seven years ago for AIMCO, but took it off the market. At that time, the property had a government-backed loan that needed to be assumed, which limited the pool of buyers. AIMCO decided to wait until the loan assumption had expired before putting it back on the market. “It could not have worked out better for them, given how much stronger today the market is than was seven years ago,” Hunt said. And while in today’s strong market there are buyers willing to assume a loan or pay what can be a prepayment penalty, given how low interest rates are, there are always more parties interested in a property when they can get their own financing, he said. Also, the seller almost always will command a higher sales price if the buyer doesn’t have to assume a loan, he said.
-An unidentified local buyer paid $4.35 million, or $320.87 per square foot and $217,500 per unit, for a 20-unit apartment building at 195 Jackson St. in Denver. Built in 1947, the property has 13,557 rentable sf and is one of the few remaining vintage, multifamily properties in the Cherry Creek neighborhood. It sold for $350,000 above list price. Robert Lawson, a senior adviser at Pinnacle Real Estate Advisors, represented the buyer in the transaction. -An unidentified buyer paid a total of $2.08 million for an apartment building in Lakewood and another in Denver. The 17-unit Lakewood property is at 1363 Pierce St. The seven-unit Denver building is at 5545 E. Yale Avenue. The sales price equates to $87,458 per unit. Jeff Johnson and Greg Breslau, with the Johnson Ritter Team of Pinnacle Real Estate Advisors, represented the seller and the buyer in the transaction. “This was a very successful transaction for both the buyer and the seller,” Breslau said. “The buyer added two great properties to their multifamily portfolio and the seller was able to achieve their 1031 exchange objectives and trade into an agricultural property in California,” he said.
-An unidentified buyer paid $2 million, or $100,000 per unit, for a 20-unit apartment building built in 1960 at 5379 Estes St. in Arvada. The building is near Olde Town Arvada and a light-rail station. Jeff Johnson, with the Johnson Ritter Team at Pinnacle Real Estate Advisors, represented both the buyer and seller in the transaction. “This apartment complex fit nicely into the buyer’s Arvada portfolio,” Johnson said. Pinnacle Real Estate Management will manage the property. -An unidentified buyer paid $740,000, or $92,500 per unit, for an eight-story apartment building at 4245 W. 70th Place and 7115-71712 Stuart St. in Westminster. Scott Fetter, a senior adviser at Pinnacle Real Estate Advisors LLC, represented the buyer in the transaction. “We approached the seller directly and put this deal together off market,” Fetter said. “The timing worked out very well for the buyer as there have been several very similar properties that have come to market and gone under contract at higher prices in the immediate area,” Fetter said. “Clearly, that underscores the strength of this market. But it also shows buyers that there’s still opportunities out there for those willing to be patient enough to uncover them,” Fetter said. -An unidentified buyer paid $690,000, or $98,571 per unit, for a seven-unit apartment building at 1961 Upham St. in Lakewood. Matt Lewallen, a senior adviser at Pinnacle Real Estate, represented both the buyer and the seller in the transaction. “The property was in good condition,” Lewallen said. “However, the buyer intends on renovating to further improve the operations,” he said. -An unidentified buyer paid $540,000, or $90,000 per unit, for a six-unit apartment building at 2000 Elmira St. in Aurora. Matt Lewallen and Kevin Calame, senior advisers at Pinnacle, represented the buyer and seller in the transaction. The new owner plans to renovate the property and hold it for the long term, Calame said.
-Cardinal Group Investments paid $61.5 million for a portfolio of 554 apartment units, or about $110,000 per unit, not the $71 million reported by the Colorado Real Estate Journal in its April 15 edition. The purchase price for the 340-unit Brittania Heights and the 214 unit at Blake + Allison equates to $110,000 per unit. The $71 million price included a separate apartment sale, which was part of the portfolio, but was not purchased by Cardinal.