Denver Multifamily Portfolio Captures Investors’ Imagination
- Sep 01, 2015
ARA Newmark had its hands full when marketing Denver’s 537-unit Cherry Creek Value-Add Portfolio–full of offers, that is. The firm, acting on behalf of Blueline Properties, fielded proposals from more than a few eager buyers before selling the five-property multi-family collection to Arel Capital for $69.5 million.
It’s not always about dollar signs. “It wasn’t necessarily price that had won; it was the terms that Arel was able to provide, the competitive terms,” Justin Hunt, executive managing director with ARA Newmark, told Commercial Property Executive. “We had upwards of 20 tours on this and it was an extremely competitive offering.”
Grouped close together just five miles outside of Downtown Denver in the blossoming Glendale submarket, the apartment properties in the Cherry Creek Portfolio consist of Four Mile Flats, Park Point, Vantage Point, Infinity Flats and The Birch. The assets were developed between 1964 and 1975, and while Four Mile Flats and Infinity Flats have been upgraded, the remaining three properties will be submitted to a substantial renovation. The investment community knew there was that certain something about the group of apartment communities.
“It was the ability to go in and reposition the assets in a location that was seeing a revitalization. Glendale is really poised for growth in 5 to 10 years,” Hunt added. The area boasts a central location near Colorado Boulevard., which has the strongest retail in Denver, close proximity to two employment hubs, apartment buildings with larger units, a little more parking than surrounding neighborhoods and a very tech-friendly community. And, it’s near the country’s only Rugby stadium. “So what we’ve seen is a lot of groups going in and repositioning these assets because the area of Glendale has completely transformed. It has had this resurgence over the last few years.”
And by repositioning the portfolio in blossoming Glendale, the new ownership will be able to capitalize on the ability to grow rents. Hunt points out that Denver has had a good three-year run with rental rates, “In 2013 we were number 2 in the country for rent growth, right behind Oakland; in 2014 we were behind San Jose for rent growth; and in the first quarter 2015, we led the nation in rent growth. We’ve had all this pressure and a lot of it’s being driven by the younger demographic that’s lived here”
Denver is certainly high on Arel’s radar. The company made its first acquisition in the city earlier this year, buying an 81-unit, three-property portfolio from another seller represented by ARA Newmark.