Colorado Real Estate Journal - June 17, 2015
When an apartment community sells in the Denver area for $60 million, it would be easy to assume it was purchased by an institutional investor. However, when the 332-unit Monterey in Denver was recently purchased for $60 million, the buyer was Littleton doctor W.L. Asher. “Dr. Asher is an institution in Denver,” said David Potarf, a senior vice president at CBRE who listed the property at 4601 S. Balsam Way with fellow team member Dan Woodward and Matt Barett. Asher has been buying apartment communities in the Denver area for more than 30 years. ”He has another property only a couple of miles away and really understands this market,” Potarf said. Asher paid $180,723 per unit and $192.90 per square foot. The seller, Holland Partner Group, paid $47.5 million, or $143,072 per unit and $152.71 per sf, according to records. Holland was motivated to sell the Monterey after Potarf and his fellow team members sold the M2 apartment community across from Monterey for $65.5 million. “The owner saw the M2 sale and decided it should capitalize on this strong market,” Potarf said. The Monterey, however, had a $38 million loan that needed to be assumed. Some institutions, he said, do not buy properties that have loan assumptions. “The loan was about 3.7 percent, so it was actually slightly below where rates are today,” Potarf said. However, Asher, in addition to assuming the $38 million loan, had to get another loan to bring the financing to 75 percent loan to value, Potarf said. Potarf thinks that Asher purchased the community for below replacement cost. “I would think that the replacement cost would be a bit north of $200,000 per unit,” Potarf said. He said the Monterey is in good shape. “I think the physical asset was really nice,” Potarf said. “It was built in 2002, so it probably isn’t a true value-add deal, but the units probably could use some minor upgrades,” he said. The Monterey also benefits from its west-side location, he said. “Demand is very strong from renters on the west side and there is little land available for new construction,” Potarf said. Potarf said that the Denver-area apartment market is so strong that even if interest rates rise later this year, as many expect, it would have little impact on demand from investors. “Investors will just find different ways to purchase properties, if interest rates do rise,” Potarf said.
-Trammell Crow Residential plans to develop an eight-story, 164-unit apartment building at 3300 E. First Ave. in Cherry Creek. “This will be one of the first projects to break ground in Trammell Crow Residential’s build-tocore strategy and we are excited to be a long-term owner and neighbor in Cherry Creek,” said Matthew Schildt of TCR. “It is already a fantastic place and we are confident that it will become even better over time,” Schildt continued. “We continue to focus on developing extremely highquality residential projects in the highest-quality infill locations in the Front Range,” he said. TCR plans to break ground this month, with completion near the end of 2017. The seller was Ogilvie Properties Inc., a value-add investor, which specializes in repositioning commercial real estate in the Denver area. “I don’t think we could have had a better buyer than TCR to complete this complex transaction,” said Stuart Ogilvie, president of his namesake company. “TCR will bring a top-class apartment development and we will bring a first-class retail and office redevelopment,” to the site. “Together we bring a much needed mixed-use project to the Cherry Creek East community,” Ogilvie added. The land, slightly less than an acre at the southwest corner of East First Avenue and Cook Street, was sold to TRC by the Denver ARA Newmark Land Services team of Chris Cowan and Steve O’Dell. “This was an extremely unique opportunity in the Cherry Creek submarket that came with several layers of deal complexity, including replacing a parking requirement for an existing office building and a rezone,” Cowan said. “In the end, Ogilvie Properties and TCR were able to see the bigger vision and success of a mixed-use development and able to overcome all obstacles,” Cowan said. “This will be an irreplaceable asset for TCR.” -An unidentified buyer paid $1.92 million, or $147,615 per square foot, for a 13-unit community at 1521 Humboldt St. The property, built in 1930, is just off East Colfax Avenue near Cheesman Park. Jeff Johnson and Matt Ritter, with the Johnson Ritter Team at Pinnacle Real Estate Advisors, assisted the seller and the buyer in the transaction. “This is an attractive property due to its excellent location and vintage building characteristics,” Johnson said. “The property was well maintained with many upgrades, including an updated electrical system, he said. The buyer owns other properties in Denver. “The buyer is excited to add this property to his Denver portfolio,” Johnson said.