Colorado Real Estate Journal - June 20, 2018
One of Denver’s most active buyers of apartments over the past decade added Modera at Observatory Park Apartments to its portfolio. The Bascom Group LLC paid $92.5 million, or $336,364 per unit, for the Class A, 275-unit community at 1910 S. Josephine St. in Denver, by the University of Denver. “Observatory Park was a rare opportunity to acquire an off-market core-plus asset in an extremely tight market. The quality of the asset, proximity to employment, transportation and educational facilities coupled with robust market fundamentals were extremely attractive to us,” noted Scott McClave, senior principal of Bascom. “The university submarket was very compelling to us due to highly desirable demographics, high home prices and affluent renter base. The property was very well designed and constructed by Mill Creek Residential – a prominent national builder with an excellent reputation,” added James Singleton, vice president of Bascom. Charles Halladay and Jamie Kline of Holliday Fenoglio Fowler arranged the $66.75 million loan with TH Real Estate for the acquisition. Tim Shunta and Brian Wynne of National Realty Advisors LLC represented the buyer. John Winsted of JW Cos. represented the seller, Mill Creek Residential, which developed and built the property in 2017. Mill Creek Residential will manage the property. The property was purchased with investment proceeds derived from the sale of a successful 20-year investment in industrial and self-storage properties in Southern California. These properties were acquired and later sold with Bascom's industrial affiliate, the Southern California Industrial Fund, and its managing member, The Magellan Group. In addition to its half-mile distance from the DU campus, Observatory Park also is less than a half-mile from the University of Denver light-rail stop, and has convenient proximity to Denver’s major retail, restaurant and employment centers. The property, according to Bascom Group, stands to capitalize on one of the strongest economies in the nation, as Denver demonstrated labor force growth of 3.9 percent year over year and a December 2017 unemployment rate of 2.6 percent, second in the nation for areas with populations greater than 500,000. Additionally, Observatory Park is set to take advantage of its premium construction finishes due to the high median household incomes and strong demand for modernized rental housing throughout the university submarket. Observatory Park features a mix of studio, one- and two-bedroom apartments from 554 to 1,221 square feet. Apartments include a stainless steel appliance package, under mount sinks, expansive windows, wood-style flooring, quartz countertops, pendant lighting, key fob entry systems, in-home washers and dryers, and 9-, 10-, 14- and 19-foot ceiling options. Community amenities include bike storage, a coffee bar, dog wash station, electric car charging station, two-story fitness studio and climbing rock apparatus, controlled access, reserved garage parking, four-season pool, outdoor fire pit and barbecue grill, and beer and wine taps in the clubroom. “We plan to implement an amenity expansion program and improved operations that will make Observatory Park a top choice among multifamily product in the immediate area. Community improvements will include upgrades to the fitness center, pool and common area additions, as well as exterior upgrades and interior enhancements,” said Paul Zakhary, vice president of Bascom. Since 2005, Bascom and its affiliates have acquired 30 multifamily properties in the Colorado market, totaling 11,057 units, becoming the most active buyer during that time frame. In 2016, Bascom sold The Breakers Resort, the second-most valuable multihousing trade in the nation for the year and the largest apartment deal in Colorado history. Over the past 12 months Bascom has completed over $1.8 billion in multifamily transactions throughout the United States. Other News Greystone Unique Apartment Group, the multifamily division of Unique Properties Inc., recently brokered the sale of a 14-unit apartment property in Denver. The Filbert Court Apartments, located at 1525-1535 Filbert Court, sold for $3.4 million, or $242,857 per unit. Greystone’s Nik MacCarter and Brandon Kaufman represented the buyer. The firm’s Marc Lippitt and Scott Shwayder represented the seller. Filbert Court Apartments consists of two buildings with 13,255 rentable square feet. Constructed in 1947, the property has a varied unit mix of five one-bedroom units and nine two-bedroom units. Located in the South Park Hill Neighborhood, Filbert Court Apartments is a stabilized and well-located asset just outside the core of Denver, added Greystone. “1525 Filbert Court is a beautifully rehabbed building. This asset is achieving market-rate rents and is a one-of-a kind asset that is located just blocks from a spur of redevelopment around Rose Medical Center,” added MacCarter. Buyer 251 Josephine LLC paid $3.45 million, or $270 per square foot, for a 12,777-sf multifamily building in Denver. The building at 2155 S. Josephine St. was sold by JOS Investments LLC. Matt Lewallen of Pinnacle Real Estate Advisors represented the buyer. Kevin Calame, also of Pinnacle, represented the seller. “The seller has owned this property for over a decade and felt this was a great time to take advantage of the current market values. The buyer is excited to own a solid asset in a great neighborhood like the University of Denver,” stated Calame. Golden Gate Apartment Group LLC paid $1.8 million for an 11-unit apartment building in Denver’s Cole neighborhood at 3351 N. Lafayette St. The New Lafayette Apartments was sold by 3351 New Heights LLC. Jason Koch of Nexus Commercial Real Estate represented the seller and Austin Smith, also of Nexus, represented the buyer. The affordable apartment community comprises eight two-bedroom, one-bath units and three three-bedroom, one- and two-bath units. The property is located at the corner of Lafayette Street and Bruce Randolph Avenue, near the River North Art District and the light-rail station at 38th and Blake street. The buyer plans to upgrade the building, improve the parking lot and stairs, make unit renovations and operate it as affordable housing.