Colorado Real Estate Journal -

Stuckers team brokers $50.2m sale of Kennedy Ridge apartments

by John Rebchook

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The 959-unit Kennedy Ridge apartment community in Denver generated a lot of interest when it hit the market.

“I think we ended up getting 15 offers,” said Pat Stucker, the senior director for Multi-Family Services in the Denver office of Cushman & Wakefield.

At the end of 2012, Stucker, along with his C&W broker team members Jeff Haag and Ray White, brokered the sale of Kennedy Ridge.

Red Hill Realty Investments, based in San Diego, paid $50.2 million for the community.

“I think Kennedy Ridge is the third-largest apartment community, unitwise, in the state,” Stucker said. “It is just short of 1,000 units, which is pretty big for Denver.” Thompson Michie Associates of Salt Lake City sold it.

According to Apartment Appraisers & Consultants’ database, created by Cary Bruteig, Thompson Michie bought the community at 10700 E. Dartmouth Ave., next to the Kennedy Golf Course, in 1996.

It had paid $32.4 million, or $33,784 per unit or $51.90 per square foot, for Kennedy Ridge.

The recent purchase equates to $52,346 per unit and $80.42 per sf for the 624,235-sf community on 29.2 acres.

“This was built in three phases,” Stucker said. “The oldest, first phase was built in 1975, with subsequent phases in 1977 and 1981.” The community is in good shape, but the new owners plan to construct a new, modern clubhouse at Kennedy Ridge, he said.

According to Bruteig’s site, Red Hill already owns three apartment communities in the Denver area, with a total of 857 units, which would mean that the Kennedy Ridge purchase more than doubles its presence in the metro area.

The recent sale represents a good deal for the buyer and the seller, Stucker said. That entire area is seeing an upgrade to its apartment stock, he said.

“We have sold about 2,500 units in a mile or mile and a half radius of Kennedy Ridge in the past year or so,” Stucker said. “The new owners of everything we have sold are starting into capital improvement programs. That means that surrounding properties are all being improved and will be raising their rents. Kennedy Ridge is one of the properties that will reap the benefit of that entire area.” Stucker said the location of Kennedy Ridge has a lot going for it.

“It is close to the Denver Tech Center and fairly close to that whole Anschutz Medical Campus. It is easy to get to I-225 and I-25 from the site. It is only blocks from a light-rail station.” It also has another thing going for it that other communities can’t boast.

“Sitting adjacent to the John F. Kennedy Golf Course, I think, certainly gives it an opportunity to provide some premium units at higher rents,” Stucker said.

Other News

The Urban Land Conservancy paid $7 million for a 100- unit apartment development at 1330 Yarrow St. in Lakewood. The seller was Shefflin Properties of Montecito, Calif. The brokers on the transaction were Jeff Hawks and Doug Andrews of Apartment Realty Advisors. -Kyle Malnati, a principal of Madison Commercial Properties, represented both the buyer and the seller in the $3.13 million purchase of the La Cherie Apartments at 23 and 33 Pearl St. in the West Washington Park neighborhood of Denver.

“The seller preferred a direct sale and we were able to match them with the perfect buyer for this property,” Malnati said.

The investment group that bought it had asked him to target the Washington Park area and, he said, “They found a gem” with La Cherie.

There were multiple contracts flying between the buyer and the seller, but Malnati was able to get the deal finalized by the end of 2012. The new owners plan to install new kitchens, bathrooms and hardwood floors, he said.

-John Laratta, a broker with Hendricks & Partners’ Denver office, represented the seller of Country Lane Apartments, a 36-unit, three-building apartment community in Arvada that sold for $2.6 million.

The sale price of $72,222 per unit is a record for a building of that vintage with 15 to 100 units, Laratta said. The building, at 7975 W. 51st Ave., was built in 1971, but has undergone numerous improvements during the past five years. It sold for a cap rate of 7.4 percent and the projected cap rate is 8.3 percent based on current market rates.

-Tenn Dexter LLC paid $1.5 million to James G. Custis for a 30-unit apartment building at 980 S. Dexter St. in Denver, which was built in 1974. Marc Lippitt of the Unique Apartment Group brokered both sides of the transaction.

-Joe Hornstein, a broker with Pinnacle Real Estate Advisors, sold two separate buildings, each with four units, at 4505-4531 E. Yale Ave. in Denver for $925,000.

The sale price equates to $115,625 per unit and $194 per square foot for the 5,036-sf buildings. The 100 percent-occupied complex, near Colorado Boulevard and Interstate 25, was constructed in 1954.

“The deal was attractive to the buyer because of the location and lack of multifamily properties nearby,” Hornstein said. “Both sides were able to capitalize on a fantastic opportunity given the current market conditions.” -Summer Star LLC paid $870,000 for a 10-unit apartment building at 1455 Vine St. in Denver.

The seller was HT LLC. Ryan Floyd of the Unique Apartment Group brokered both sides of the transaction.

-Emerson Street at Swallow Hill LLC paid $675,000 for a multiunit building and carriage house that includes two adjacent development lots at 1620-1632 Emerson St. in the heart of the Uptown neighborhood in Denver. Both sides of the transaction were handled by James C. Karo Associates. -Ryan Floyd of the Unique Apartment Group listed a fourunit apartment building at 4812- 4818 W. 11th Ave. in Denver that sold for the full asking price of $425,000. Jason Koch, also a broker with the Unique Apartment Group, represented the buyer. Neither the buyer nor seller was identified.

-Robert Lawson of the Johnson Ritter Team at Pinnacle Real Estate Advisors LLC represented the owner of a three-unit apartment building at 1400 Cook St. in Denver that he sold for $415,000, or $138.33 per unit. The building was constructed in 1906 in the Congress Park neighborhood.

“This property is a great multifamily triplex that is located in an excellent neighborhood,” said Jeff Johnson, principal at Pinnacle Real Estate Advisors.