Colorado Real Estate Journal - May 20, 2015
The largest apartment community in Montbello has been sold. Not that there are that many good-sized apartment communities in that northeast corridor, said Terrance Hunt of ARA Newmark, who was part of the team that sold the 760-unit Villages at Gateway for $45.2 million. “There really are only two major apartment communities in Montbello,” Hunt said. The Villages at Gateway, built in 1970 by Jordon Perlmutter, is about a third bigger than the next largest, he said. The buyer was Jager Management Inc. of Jenkintown, Pennsylvania. The seller, Bridge Property Management of Murray, Utah, paid $33 million for the community at 12175 Albrook Drive in 2002, records indicate. “This was Jager’s first purchase in Denver,” Hunt said. “They have been looking for about a year and this was the first deal they were able to get done,” he said. And Hunt said he thinks they made a good deal, even though some prospective purchasers were scared off by its location, as well as its need for immediate cure to deferred maintenance. Jager plans to immediately invest $5.14 million into the property. Improvements will include a new roof, new windows and a new boiler, he said. Jager purchased it for $59,474 per unit and $86.19 per square foot. Factoring in the immediate improvement investment, it paid the equivalent of $66,237 per unit. That is about a third of the cost of replacing it, if a developer could put together such a large deal on the 25-acre site in today’s market, according to Hunt. The ARA Newmark team only received about five offers for it, while many value-add deals are getting three to four times that many offers. “One guy who looked at it thought it was way too expensive, probably because it needed so much money invested per unit,” Hunt said. “But this whole north StapletonDIA area is really evolving,” Hunt said. “I think that area has a really bright future,” Hunt said. He pointed to the nearby train station that will serve the Denver International Airport train at Peoria Street and Smith Road that will open in 2016, as one of the amenities to the area. “There also is a lot going on in that Stapleton north area, DIA and Fitzsimons,” Hunt said. “A lot of people who rent at the Villages at Gateway are in construction and there is a lot of residential construction opportunities in that area,” he said. Also, the Villages at Gateway have some of the lowest rents in the metro area for an apartment development. “We have a real shortage of affordable housing in Denver,” Hunt said.