Wood Partners, East West Partners Arrange $62M in Capital for Denver Multi-Family
The road has been paved for Wood Partners L.L.C. and East West Partners to commence construction of Alta City House, a luxury apartment project in Denver’s blossoming Union Station/Riverfront Park redevelopment, now that the developers have arranged capital from USAA Real Estate Company to move forward with the $62 million project.
Wood Partners and USAA have history, with USAA having now served as capital partner on projects with a total investment of $200 million. But it’s more than just an existing relationship that supports the validity of the investment. Now is the right time and Denver is the right place for apartment development. According to Marcus & Millichap Real Estate Investment Services Inc., the apartment-vacancy rate in the city will continue to decline, dropping an estimated 30 basis points this year to just 4 percent.
“The factors driving demand are lack of supply and mid-2000 run up on apartments, lower propensity to own, the Echo Boomer bubble and ongoing population growth in Denver over the last 10-plus years,” Tim McEntee, director with Wood Partners, told Commercial Property Executive.
Wood Partners and East West forecasted the perfect storm for apartment development at the Alta City House site years ago. The team acquired the land for the project in 2006, one year before completing their well-received Glass House condominium high-rise nearby in Riverfront Park. In addition to the advantage of being built in a high-demand environment, the five-story residential project provides the added benefit of a location in a burgeoning neighborhood. “Union Station is a nationally known urban multi-model redevelopment with an extremely successful Riverfront to our West and wildly successful Lower Downtown to our east,” he added.
And then there’s the project’s highly coveted status of being a transit-oriented development. Alta City House will sprout up practically a stone’s throw from a new light rail station and just a few blocks from a future train stop that will provide direct access to Denver International Airport.
Despite the favorable conditions in Denver and the Union Station area, securing capital for apartment projects is no simple feat. Alas, Wood Partners and team do not fear any substantial amount of competition. “The only deals that are financed are Alta City House and Zocala’s high rise apartments, and Alta City House is the most cost-effective wrap product being developed thus far,” McEntee said.
Construction of Alta City House, designed by Paul T. Bergner Associates, is on track to begin in August, with Wood Partners at the helm. Doors will open to the first residents in September 2013.