Colorado Real Estate Journal - November 19, 2014
Milestone Apartments, a real estate investment trust based in Toronto, recently paid $40.5 million for the 221-unit Village at Legacy Ridge in Westminster. The community at 3850 W. 112th Ave. was sold by Denver-based Corum Real Estate Group. The sale equates to $183,326 per unit. Legacy Ridge was built in 2001 on a 12.3-acre site and currently is about 97 percent occupied. The average monthly rent is about $1,200 per unit. The average rents are higher than the average rents in the REIT’s portfolio, according to Milestone. One reason the rents are higher is because the Village at Legacy Ridge has a higher proportion of two- and threebedroom units than found in its overall portfolio, according to Milestone. Milestone was drawn to the property because of its proximity to both Boulder and downtown Denver. As part of the purchase, Milestone assumed a fixed-rate mortgage of about $23.6 million at an interest rate of 3 percent. The loan is fully amortized on a 35-year schedule maturing in October 2046. The financing terms decrease the REIT’s weighted average interest rate and extend the maturity of its mortgage note obligations, Milestone said. The balance of the purchase price will be funded using proceeds raised from the REIT's recently completed $115.1 million (in Canadian dollars) equity offering. The garden-style, two- and three-story walk-up has consistently boasted an occupancy rate average of 99 percent. The site provides direct access to a golf course and an extensive trail network. Corum, on its website, described its investment strategy for the community as “build-to-core,” in which it acquired the land and developed it with an institutional partner with the idea of holding it for the long term. Corum recapitalized the loan in 2006, with investors exiting with a 14 percent-plus internal rate of return. In total, Corum recapitalized the property three times, with all investors exiting with more than a 12 percent IRR. In 2012, solar panels were added that power the common areas. They were partially funded with tax credits. Pat Stucker, an apartment broker with JLL, wasn’t involved in the sale, but has sold numerous apartment communities in the area and is familiar with the development. “Investors really like that whole Westminster corridor,” Stucker said. “It is close to downtown Denver, as well as Boulder, so it is a great place to live if one person works downtown and the other in Boulder,” he said.