by John Rebchook
Last year was one for the
Denver-area
multifamily
housing record book.
Investors paid a record $4.44
billion for apartment commu-
nities in the metro area last
year, topping the previous
record set in 2014 by $903 mil-
lion, a 25.5 percent jump.
The record pace is becoming
a bit of a broken record, albeit
a welcome one for sellers.
“During three of the past
five years, the metro Denver
apartment market has set
a record for sales volume,”
pointed out Jeff Hawks, vice
chairman at ARANewmark’s
Denver office.
It’s not unusual for records
to be driven by the sale of a
handful of core assets, such
as properties in downtown,
which command high pric-
es. That is true in other asset
classes, such as offices, as well
as for apartments.
However, the apartment
market soared to a record
level without any high-profile
downtown deals skewing the
numbers.
“We sold three buildings
over $300,000 per unit in 2015
and not one of them was a
'core' downtown deal,” said
Terrance Hunt, a broker with
ARANewmark.
That could change this year.
"I estimate that we will see
three or four downtown sales
this year and these deals will
sell at record prices,” Hunt
said.
“This could be the year
Denver breaks through the
$400,000-per-unit level,” Hunt
said.
While no core downtown
properties sold last year, Shane
Ozment, a partner with Hunt,
Hawks and Doug Andrews
for the past 15 years, has wit-
nessed the rapid appreciation
of suburban, garden-style
properties.
“In early 2015, there had
never been a garden-style,
suburban apartment property
that sold for over $220,000 per
unit,” Ozment said.
“In the past six months,
ARA Newmark brokered
sales for $228,000, $253,000
and $260,000 per unit.
“And in January of 2016, we
closed Outlook Littleton for
$289,000 per unit,” Ozment
said of the new high-water
Shown is One Observatory Park near DU, which late last year set a sales record for a nondowntown,
core-asset apartment building.
by Jill Jamieson-Nichols
A 93-year-old real estate
company expanded its Den-
ver metro holdings with two
office properties in the south-
east suburban submarket.
Melcor Developments Ari-
zona Inc. bought the Offices
at the Promenade and Office
Plaza at Inverness in separate
transactions totaling $26.45
million.
Offices at the Promenade is
a 128,400-square-foot property
at 7935 and 7995 E. Prentice
Ave. in the Denver Tech Cen-
ter. Felton Properties sold the
two buildings for $16.85 mil-
lion, or $131.23 per sf.
Office Plaza at Inverness
sold for $9.6 million, or
$102.89 per sf. It consists of
93,314 sf in three buildings at
6 Inverness Court East, and 8
and 10 Inverness Drive East in
Inverness Business Park.
“We’re very bullish on the
Denver market,” said Melcor
Vice President Darin Rayburn,
noting net migration, a young
demographic and light rail
lend to the region’s vibrancy.
Melcor owns 1,100 acres of
residential land in Aurora and
also owns the Centennial Air-
port Plaza office building. The
acquisitions give it a presence
in the southeast submarket’s
two major office nodes, Ray-
burn said.
“The Denver Tech Center is
a development that we covet,”
he said, adding Inverness also
offers a master-planned envi-
ronment. “We understand
the power of a good master-
planned community,” he said.
Melcor Developments is
affiliated with Edmonton,
Alberta, Canada-based Mel-
cor Developments Ltd., which
was founded in 1923 and
where Rayburn serves as exec-
utive vice president. Melcor
also has a Canadian real estate
investment trust, of which he
is CEO.
The company does its U.S.
business out of Scottsdale,
Arizona, and is a long-term,
hands-on owner. “We’re not
capital markets people. We’re
real estate people,” Rayburn
said.
There likelywill be improve-
ments to the company’s new-
est Denver properties, but
not before collecting feedback
from tenants.
Melcor has a third Denver-
area office property under con-
tract that’s expected to close
soon.
Both Offices at the Prom-
enade, and 6, 8 and 10
Inverness offer upside for the
new owner, according to bro-
kers involved in the deals.
At Offices at the Promenade,
“Market rents are about $23 a
square foot, and the average
rents in place are about $19.50,
so there’s a considerable
amount of upside potential in
Office Plaza at Inverness, located at 6 Inverness Court East, and 8
and 10 Inverness Drive East, comprises 93,314 square feet.
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