Colorado Real Estate Journal -
When Kal Zeff came to Denver in 1953 with barely a penny to his name, he asked a rabbi to introduce him to some people. His first social dinner in Denver, where he ultimately built an unrivaled apartment empire, was at the home of Lester and Cookie Gold, who remained his friends for more than a half-century. Lester, who died in 2011, and Cookie are the grandparents (on her mother’s side) of the wife of developer and apartment investor Matthew Joblon, CEO of BMC Investments. BMC, late in the day on Dec. 31, paid $40 million for the 573-unit Spyglass Hill apartment community at 7100 E. Mississippi Ave. in Denver, which Zeff’s company built in 1974. The sale marked the last of more than 8,800 units in the portfolio of Carmel Cos., the name of Zeff’s company. The entire portfolio of Carmel’s 29 apartment communities sold for more than $880 million, the largest apartment portfolio to sell in Denver’s history. Zeff died in 2005, a time when the apartment market was far weaker than it is today. In May 2011, his children listed the portfolio with a CBRE team that included Dan Woodward and David Potarf. “I think it is really interesting how it came full circle and we bought the final asset in the portfolio,” given Zeff’s longtime relationship with the Gold family, Joblon said. Joblon’s wife is the daughter of Lee Alpert. The Alpert family, a prominent real estate family in the Denver area, also were close friends with Kal Zeff. The Alperts, however, were not involved in the purchase of Spyglass or any of Joblon’s other apartment deals in the metro area; with the purchase of Spyglass, BMC owns about 1,800 units in the Denver area. Joblon has his own line of equity available from a number of wealthy individuals, including a prominent hedge-fund manager in New York City. “These are people who don’t like to see their names in the newspaper,” Joblon said. The purchase of Spyglass almost didn’t happen. The property had been under contract, at a higher price, twice before he purchased it. BMC plans to invest $1.5 million to upgrade the property. “It has great bones,” Joblon said. “Carmel did a great job of constructing it, but it is almost a 40-year-old asset.” He also said it was extremely well-maintained and operated, “as were all of Carmel’s properties. We’re keeping the entire Carmel staff.” The purchase price comes to $69,808 per unit. The replacement cost, Joblon said, would be about $150,000 per unit. However, that is not a very good metric, he said. “The truth is, if you were going to demolish it and rebuild it, you would build a much higher-quality property, so replacement cost is kind of meaningless,” Joblon said. Upgrades will include taking care of any deferred maintenance, making the mechanical systems more efficient, enhancing the curb appeal and repositioning the leasing center, clubhouse and amenities, he said. BMC closed the transaction, which included a $33 million Fannie Mae loan, in 28 days from start to finish. (See Finance on Page 37)