Colorado Real Estate Journal - January 20, 2016
In a record-setting deal, an ARA Newmark team sold One Observatory Park near the University of Denver as 2015 drew to a close. The Wolff Co., based in Scottsdale, Arizona, paid $82.5 million for the 213-unit One Observatory Park at 2100 S. University Blvd. At a sales price of $374 per square foot, including 10,000 sf of ground-floor retail, it is the highest price paid in Denver for a noncore apartment community with at least 50 units, according to Anna Stevens, of the ARA team that sold it. Stevens and fellow ARA brokers Jeff Hawks, Doug Andrew, Shane Ozment and Terrance Hunt sold it on behalf of the developer and owner, Urban West Group LLC. Denver-based Urban West is headed by David Elowe. The $387,324 per unit that Wolff paid also is the highest price per unit for a noncore, 50-plus unit apartment community in the Denver area, according to Stevens. “For a non-downtown asset, it is a record,” Hunt said. The 12-story building at Evans Avenue and University opened in 2013. “David bought the land when everything was in disarray in 2008 and 2009,” Hunt said. At that time, many investors either didn’t have the ability to finance a purchase or were afraid of the risk of building in a market suffering its first national downturn since the Great Depression. Yet given how much and how fast the apartment market in Denver has bounced, that was an ideal time to bet on the city’s economic recovery, Hunt said. “When David built that highrise-style product, construction and land costs were 50 percent to 75 percent lower than they are today,” Hunt said. The sale, he said, “really is the cliché win-win,” Hunt said. “Wolff knows you couldn’t build something like that on that site, because it would be cost prohibitive,” Hunt said. “They paid a record price, but they still purchased it below replacement cost,” Hunt said. In addition, One Observatory Park benefits from its proximity to DU, he said “It wasn’t built as student housing, but there are a lot of students at DU who come from affluent families that can afford to live in a Class A building like One Observatory Park,” Hunt said. “These are the type of students who might live in a Class A property in Cherry Creek,” he added. “One Observatory Park really has a longtime anchor with DU,” Hunt said. It also is a transit-oriented site, providing easy access to the Denver Tech Center or downtown Denver, with no need to get behind the wheel. “You are walking distance from light rail,” Hunt said. Hunt said Wolff outbid about 10 other competing offers from well-qualified buyers. Other News An unidentified local buyer paid $3.1 million, or $119,231 per unit and $102.07 per square foot, for the 26-unit Wadsworth Arms apartment building at 6700 Wadsworth Blvd. in Arvada. The property was constructed in 1957. Josh Newell, a senior adviser at Pinnacle Real Estate Advisors LLC, represented both the buyer and the seller in the transaction. An unidentified buyer paid $2.14 million, or $194,091 per unit and $264.79 per sf, for an 11-unit apartment building at 1116 Emerson St. in Denver. The property was constructed in 1901. Robert Lawson, a senior adviser at Pinnacle, represented the seller. Thomas Graeve, an associate adviser at Pinnacle, represented the buyer. Lawson said, “1116 Emerson is a true pride of ownership asset in one of the best locations in metro Denver.” “The property was meticulously cared for and has some of the best curb appeal you could ask for,” Lawson added. “This is a beautiful historic building in the heart of Capitol Hill – my client fell in love with the property instantly. It is a perfect addition to his portfolio,” according to Graeve.