Colorado Real Estate Journal - December 2, 2015
While the sale price wasn’t released, records show that Invesco Real Estate recently paid $125 million for the 518-unit Retreat at Park Meadows. It is believed to be the largest apartment community sale in the southeast corridor submarket since the 1,184-unit Palomino Park sold about a decade ago for $176 million. However, Palomino Park sold for $148,649 per unit, while the Retreat at Park Meadows sold for $241,313 per unit. “On a per-unit basis, for sure, this was a record sales price for this area,” said Jordan Robbins, a managing director at Holliday Fenoglio Fowler LP, who represented the seller in the transaction with HFF Associate Director Jeff Haag. The seller was PNC Realty Investor Inc., acting as investment adviser to the AFL-CIO Building Investment Trust. Records indicate PNC purchased the property in 2002 for $56.5 million, or $109,073 per unit. The Retreat at Park Meadows was developed by the Morgan Group and opened in 2000. None of the units had been upgraded since it was built 15 years ago. “I wouldn’t say it is totally unusual, but what that does is create an ideal situation as a value-add play,” Robbins said. Buyers, he said, know they can receive a much higher yield from improved properties than from units that they buy at market rates. “Invesco is going to be putting quite a bit of money into the individual units and the exterior,” Robbins said. “A year from now, this property is going to look quite a bit different, on the inside and the outside,” Robbins said. “I think Invesco will do very well with this property,” he said. Because of its location, size and the value-add component, Invesco had a great deal of competition from other buyers. “There was a ton of interest,” from prospective buyers, Robbins said. “We had a lot of national players interested in buying it,” Robbins said. “A lot of the buyers interested in buying it were new to the market.” There was almost nothing else like it on the market, he said. “It’s on 33 acres and it would be very tough to assemble that much land today,” Robbins said. “It’s next to a light-rail station and it is in a very strong demographic area.” The Retreat at Park Meadows represents Invesco’s biggest purchase in the Denver area so far, according to Apartment Insights, the apartment community database owned by appraiser Cary Bruteig. Before this purchase, since 2009, Invesco had paid a total of $218.15 million for three other apartment communities with a total of 801 units. Two of the previous purchases were in downtown Denver and one was in Broomfield. In 2014, Invesco paid $94.75 million for the 285-unit Verve near Union Station in downtown Denver. That sale equated to $332,456 per unit and $408.26 per sf. In 2013, Invesco paid $70 million for the 219-unit Cadence Union Station, which is the equivalent of $319,636 per sf and $397.01 per unit. In 2009, Invesco paid $53.4 million for the 297-unit Catania in Broomfield. That equates to $179.80 per unit and $17.76 per sf. Other News An unidentified buyer paid $1.83 million, or $91,250 per unit and $165.58 per sf, for a 20-unit apartment building at 344 S. Marion St. in Englewood, near Swedish Medical Center. Joe Hornstein and Scott Fetter of Pinnacle Real Estate Advisors represented the buyer in the transaction. “The sellers owned long-term and were not considering a sale until they were approached by a 1031 buyer,” Hornstein said. “The in-place investment return was well below market, but the buyer intends to reposition the property and stabilize at higher rates,” he said. An unidentified buyer paid $1.21 million, or $120,500 per unit, for a 10-story apartment building at 3605-3685 Pierce St. in Wheat Ridge. The buyer was represented by Kevin Calame and Matt Lewallen, senior advisers at Pinnacle Real Estate Advisors LLC. “The property was in good condition and the buyer plans to bring the rents up to market rate,” Calame said. An unidentified buyer paid $1.12 million, or $80,000 per unit and $138.08 per sf, for a 14-unit apartment building at 1225 Yosemite St. in Denver. The property was built in 1962; it is south of Colfax Avenue and north of Lowry. Joel Hornstein and Scott Fetter represented the buyer. “The buyer was able to purchase a building with updated units, newer systems and good existing cash flow,” Hornstein said. “The sellers decided the timing was good to sell and reinvest their equity into other nonreal estate-related opportunities,” he said.