Colorado Real Estate Journal - February 3, 2016
Littleton-based Asher Investments, headed by longtime apartment investor Dr. W.L. Asher, recently sold two apartment communities for a total of $50 million. Both apartment communities, one in Denver and the other in Northglenn, were sold by the CBRE team of Dan Woodward, David Potarf, Matt Barnett and Jake Young. In the larger of the two deals, Griffis Residential, based in Greenwood Village, paid $31.5 million for the 150-unit Legends at Lowry apartment community at 9649 E. Fifth Ave. The sales price equates to $210,000 per unit. Asher Investments had paid $27.5 million in 2013 to Louisville-based Real Capital Solutions, or $183,333 per unit. That equates to a 14.5 percent return on the purchase price. “This was a nice, clean, newer property,” Potarf said. “We had some exchange buyers from California who were interested in it, as well as a number of other out-of-state and local buyers,” Potarf said. Griffis Residential didn’t have to be sold on the appeal of Lowry. “They are local buyers and they know and understand that submarket really well,” Potarf said. Also, the units in the Legends at Lowry are first class with high-end finishes, he said. “They were initially going to be condos and they were built to condo quality,” Potarf said. Real Capital Solutions, headed by Marcel Arsenault, bought the property during the economic downturn and converted them into rental units. The size of the community made it appealing to a large number of buyers, some of whom may not normally have been able to afford such a high-quality asset in such a spectacular location, he said. “It definitely appealed to some private people who could afford to buy it given its size,” Potarf said. “On the other hand, there are some institutional buyers that have to buy properties that have 200-plus units,” he said. “I wish I had 10 properties this size in such a great location; I could sell them all day,” Potarf said. He said Griffis Residential probably paid very close to the replacement cost for Legend at Lowry. In the other deal, Fowler Property Acquisitions of San Francisco paid $19.5 million for the Washington Park apartments at 11501 Washington St. in Northglenn. The sales price equates to $108,333 per unit. Asher Investments purchased Washington Park in 1996 for $4.5 million, or $25,000 per unit. In other words, he sold it for 333 percent more than what he paid. Adjusted for inflation, Asher Investments paid the equivalent of $6.8 million for the property in today’s dollars, the equivalent of a 187 percent return in real dollars. The property was built in 1974. “We had a lot of interest from numerous buyers and Fowler hit the number,” Potarf said. “This was a pretty high price per unit for a ’70s product, but I don’t think it was a record” for that vintage of a property, Potarf said. Fowler recently bought two other communities along the north corridor. It also has been an active buyer along in the southeast corridor, he said. “The buyer liked the opportunity to further grow its portfolio in the northern suburbs,” Potarf said. “I think they also liked that it is only 15 minutes from downtown Denver and it is a good alternative to higher-priced units in Denver,” he said. Also, it is a value-add deal. “Since it is a ’70s product, there is an opportunity to upgrade units,” Potarf said. Investors like value-add deals because the internal rate of return on the improvements always exceeds what they earn on the overall purchase price. “These value-add deals always attract a lot of offers,” Potarf said. In this deal, Asher Investments had owned the property for a long time, while he only held the Lowry property for a few years. “Until recently, Dr. Asher had not been much of a seller,” Potarf said. “It was kind of unusual for him to sell anything, regardless of how long he owned it,” he said. “For whatever reason, he has decided to sell some of his properties at this time.” Other News An unidentified buyer paid $5 million, or $119,047 per unit, for a 43-unit apartment building at 1450 S. Reed St. in Denver. Kevin Calame and Matt Lewallen, senior advisers at Pinnacle Real Estate Advisors, represented the buyers in the transaction. “The buyer is excited to do a complete renovation of the property and take advantage of the strong multifamily market in Colorado,” Lewallen said. An unidentified buyer paid $2.88 million, or $169,117 per unit, for a 17-unit apartment building at 2441 S. York St. in Denver. Kevin Calame and Matt Lewallen of Pinnacle Real Estate Advisors represented the sellers in the transaction. Mark Goodman and Paul Schneider,senior advisers at Pinnacle, represented the buyer. An unidentified buyer paid $2.78 million, or $163,235 per unit and $269,34 per square foot, for a 17-unit apartment building at 1139 York St. in Denver. The property was constructed in 1962. Jim Knowlton and Robert Lawson, senior advisers at Pinnacle Real Estate Advisors, and Chris Knowlton an associate adviser at Pinnacle, represented the seller. JB Hochman and Justin Brockman, senior advisers at Pinnacle, represented the buyer.