Colorado Real Estate Journal - June 17, 2015
Greystar Real Estate Partners of San Francisco recently paid $63.8 million for the Riverton on the Platte apartment community in Sheridan, one of the latest deals showing the continued strong interest in the Denver-area apartment market. Greystar, one of the world’s largest apartment management companies, paid the equivalent of $201,899 per unit for the 316-unit apartment community at 3400 S. Platte River Drive, just off South Santa Fe Drive, near West Hampden Avenue. Records show that Wastach Premier Communities, the seller, had purchased the community, which was built in 2009, for $48.25 million, or $158,690 per unit. In other words, Greystar paid about 32 percent more than Wastach. Riverton on the Platte is a unique property in that, while constructed fairly recently, it also has a big value-add component, said Pat Stucker, who sold the property with fellow JLL team members Ray White and Travis Hodge. Wastach, he said, took 50 of the units and outfitted them with high-end finishes, such as granite countertops, wood floors and upgraded cabinets. “Even though it was built in 2009, it had a very nice value-add component,” Stucker said. Investors are especially interested in value-add deals, as the value-add portion typically will return a much greater gain than the purchase of the units themselves. Riverton on the Platte represented the best of both worlds, in that it was relatively new construction, as well as providing the value-add component, Stucker said. That is pretty rare, he said. “Every developer does it a little different, but in general, the newer product is built to higherquality finishes and you don’t find differentiations in finishes throughout the community,” Stucker said. In addition to the value-add component, Riverton on the Platte benefits from a great location, he said. For one thing, it isn’t threatened by a lot of units, which could drive down rents. “I think that is an underserved area as far as multifamily housing,” Stucker said. “It is an area that doesn't have a lot of new construction,” he said. Also, renters benefit from the River Point at Sheridan, an 821,230-square-foot retail center that includes a Regal Cinemas movie theater, Super Target, Costco and other retailers. “It’s a great retail center, right out their doors,” Stucker said. Riverton on the Platte also is about a 15-minute drive from downtown Denver and is across the street from the Southwest light-rail line. “You can easily take light rail to downtown,” Stucker said. And for those who prefer to bike, it is minutes form the South Platte River trail. Another nearby amenity is the Englewood Golf Course. “I think Riverton on the Platte has attracted millennials and other younger professionals who like the easy access to downtown, without having to pay downtown rental rates,” Stucker said. The average apartment rental rate in that area is $1.40 per sf, about half of what new downtown Denver apartments are charging. It also has drawn older renters, who also enjoy its location and amenities. “It has a very nice clubhouse and a resort style swimming pool,” Stucker said. The area also has strong demographics. The average household income within a three-mile radius is $62,218, while within a five-mile radius it is $73,607, according to JLL’s research. Meanwhile, Santa Fe Drive and West Hampden Avenue, combined, draw about 130,000 vehicles daily. “It is a high-visibility site,” Stucker said. As this sale indicates, there is no shortage of interest from investors in Denver-area multifamily housing, Stucker said. That is a trend he expects to continue. “There is an amazing amount of capital available for real estate investments in general, and Denver is the darling of the investment industry,” Stucker said. For one thing, despite record rents and values, Denver provides a better deal than investing on either the West or East coasts, he said. “You can pay a slightly higher cap rate in Denver and the delta, or difference, of the return on your investment yield is greater in Denver than on either coasts,” Stucker said. “You can achieve a measurably better return on your investment than on either coast,” he said.
-Phoenix-based Evergreen Development recently completed the 250-unit Outlook Littleton apartment community on 16 acres at West Mineral Avenue and South Platte Canyon Road in Littleton. The community includes 10,000 square feet of retail space. Outlook Littleton is near a lightrail stop and the Aspen Grove Shopping Center and miles of hiking and biking trails, including the Platte River trails. “Outlook Littleton is one of three multifamily development projects that we have underway in the Denver area,” said Jeff Wikstrom, vice president of multifamily communities for Evergreen Development. “Our other multifamily communities under development are located in Golden and in the Denver Tech Center.” The two- and three-story community in Littleton includes: • A resort-style pool and hot tub, clubhouse, billiards and business center; • A fitness center, running track, dog park and dog wash; • A community garden and great lawn; • A bike and ski maintenance facility; and • Detached, private garages. Rents begin at $1,215 a month for a one-bedroom unit and $1,599 for a two-bedroom unit. “Outlook Littleton will be a family friendly community with convenient shopping and dining options, and access to plenty of outdoor activities,” Wikstrom said. Denver-based Kephart is the architect. Rand Construction Corp. is the contractor. Building and Land Technology, based in Stamford, Connecticut, is Evergreen’s equity partner. “Evergreen’s concept for the apartment community, combined with a highly attractive site location, initially attracted us to the project,” said Greg Bates, fund manager at BLT. “Evergreen has delivered exactly the resident experience that we hoped to achieve. Outlook Littleton is a fantastic community and a great addition to the local area. We are pleased to be a part of the project.”