Colorado Real Estate Journal - October 1, 2014
An apartment building with finishes and amenities that are as nice as those found in a Four Seasons or Grand Hyatt Hotel. Another community on what is believed to be the highest point in Denver with a resort-style lazy river swimming pool. And plenty of bike-maintenance rooms, gyms as nice or nicer than commercial facilities and dog washes. These were some of the features of the nine apartment communities toured by more than 115 apartment officials last month. It was the 11th annual Colorado Real Estate Journal apartment bus tour. Riders on the two buses represented companies that in total own more than 170,000 apartment units. The local communities on the tour, from Broomfield to Inverness, have a total of 2,500 units and a combined estimated value north of $600 million. David Martin and Pam Koster of Moran & Co. led one tour bus. The other tour bus was led by Cary Bruteig, principal of Apartment Appraisers & Consultants, and Terrance Hunt, a top apartment broker with the Denver office of ARA. The tour provided a microcosm of the overall Denver-area housing market that arguably has never been stronger, with low vacancy rates and record-high rents, despite the biggest building surge in three decades. “What is amazing is how well everyone is doing,” Hunt said. “Every community we toured, the buildings are leasing faster than expected and they are getting rents above what they budgeted for,” Hunt said. For many on the tour, the highlight was the last stop, which was the smallest but the most expensive and most dense of the communities. The five-story, 107-unit My Block Wash Park at 255 Washington St. was developed by the Sepic family. “This is the nicest apartment building in Denver,” said an executive of another company that itself develops luxury apartment communities. My Block Wash Park has a density of 147.59 units per acre. The average rent is $2.71 per square foot at My Block, according to AAC, the highest of the nine communities on the tour. By contrast, the Retreat at the Flatirons, a 374-unit community in Broomfield, had the lowest density of the properties on the tour with 18.94 units per acre. Its average rents are around $1.50 per sf. The Sepic family hired a Seattle-based interior designer who has designed a number of highend, luxury hotels for the interior touches at My Block. This is how Bruteig described My Block: “Exterior and interior finishes are very high-end, with real wood floors, gorgeous tile in the bathrooms, and an amenity that I have not seen anywhere else: your own temperature-controlled wine cooler in each apartment. “The amenities are too numerous to mention, but include an infinity-edged, Carrera marble rooftop pool, with views through the clear-glass railings.” “There are not one, but two rooftop decks with three grilling stations, fire strip, and a cabana bar for socializing,” he said. “There is also a bike and ski tune-up room, yoga studio with free professional instruction, hydro dog wash, and large fitness room on the first floor.” Here are some highlights by Bruteig and others on the other communities on the tour: • The 424-unit Camden Flatirons at 120 Edge Drive in Broomfield, the largest community on the tour. “Camden Flatirons is a podium design, with four stories of woodframed apartments built above a concrete ground-level parking structure, resulting in five-story structures. The steeply sloping topography, while providing good views, made it challenging to fit a lot of apartments on the site. The ratio of parking spaces is fairly high at 1.75 spaces per unit, and just over one space per bedroom.” Camden Flatirons has no studios, as one of its primary markets is families. • The Retreat at the Flatirons, owned by the Etkin Johnson Group LLC. The Retreat was built by a joint effort between Lauren Brockman, formerly with Allied, but now with his own company Anbrock, and Etkin Johnson, the landowner. “The average size is a very large 1,052 square feet, and the average base rent is $1,366 and $1.30 per square foot,” according to Bruteig. “Leasing activity has been so strong that the developers are already contemplating building a second phase together.” • The 220-unit Rockvue at 250 Summit Blvd. in Broomfield. It is owned by Carmel Partners of San Francisco. Kim Hoekesema of Carmel said they typically stay away from developing in Broomfield as the fees are so expensive, about $23,000 per unit. However, in this case, Carmel was able to get a great deal on the land, which was a distressed property, making up for the high fees, she said. Zoning, however, only permitted Carmel to develop 220 units on the 11-acre site. The architect was KTYG. • The 297-unit Alta Harvest Station at 11775 Wadsworth Blvd. in Broomfield. Tim McEntee of Wood Partners developed the Alta Harvest. According to AAC’s last survey, the average rent per sf was $1.47. McEntee, however, said rates have risen to an average of $1.56 per sf. That is almost an 8 percent jump from AAC’s fairly recent survey. “We are exceeding our pro forma,” projections, McEntee said. Alta Harvest Station is a LEED Silver certified community. • The 362-unit Veranda Highpointe at 6343 E. Girard Place in Denver. The Forum Real Estate Group owns the community. It gets its name because it is the highest point in Denver, Hunt said. The apartment community’s elevation is as high as 5,571 feet, according to Google Earth. Veranda Highpointe was built in 2013 on the site of a former Ramada Hotel. Given its elevation it has “exceptional visibility” of the mountains, according to Bruteig. Hunt noted that even though the community overlooks Interstate 25, the noise level is surprisingly low, even when the windows and doors are open That is because I-25 traffic flows at a steady pace during most of the day. Noise tends to be noticeable when there is a lot of stop-and-go driving, he said. Bruteig told the tour members they are entering an “amenity-rich environment.” “There are so many amenities in so many places that we will not have time to see them all, but you will get to see plenty,” he told those on the tour. “The standout, signature amenity is the lazy river in the main courtyard,” he said. • The 196-unit Monaco Row at 4665 S. Monaco St. in Denver. Monaco Row is a garden-style property recently created by Shea Properties, the owner of the Denver Tech Center. The clubhouse profile appears to have been kept low so as not to block the impressive views from the apartments to the east, according to Bruteig. “While most of the new nearby product is wrap construction with much higher density (and 100 percent garage parking), Shea chose to offer a garden-style product, believing it would have strong appeal,” according to Bruteig. “Apparently they were right, as the rent levels are much higher than in the nearby wrap product – $1.74 per sf at Monaco Row.” “The lesson: packing a bunch of apartments into a dense design with a concrete parking structure and long hallways does not earn you higher rents. But it does cost a lot more to build.” • The 272-room Capstone at Vallagio at 158 Inverness Drive in the Inverness Business Park. This is the first community in the Denver area by the Wolff Co., based in Scottsdale, Ariz. Wolff bought and developed the plans from Denver-based Peter Kudla of Metropolitan Homes. Wolff also recently broke ground on the Residences at Dry Creek, south of Arista near the 1stBank events center near the Alta Harvest Station in Broomfield. Capstone has a podium design with four levels of framed apartments over one level of belowgrade parking. This allowed a density of 39 units per acre. The parking is fairly evenly split between the underground parking structure and surface spaces, for an overall ratio of 1.6 spaces per unit and prime space per bedroom. The 4,800-sf clubhouse has some creative finishes.” • The 248-unit Parc at Greenwood Village at 5500 DT Parkway in Greenwood Village. It was designed by KTGY and was developed by TPG/Grand Peaks Acquisitions, which opened it earlier this year. “Grand Peaks is led by the third generation of the Simpson family apartment development legacy, Nick and Luke Simpson,” Bruteig said “Another garden-style development, it does achieve a high density of 28 units per acre.” After that, the group headed to My Wash Park. “Our last and, in many ways, our best property on the tour,” Bruteig said. Few on the tour would disagree with his assessment. “It really raises the bar,” Hunt said. “It shows what you can do when you pull out all the stops.”