Colorado Real Estate Journal -
When the 12-story Wellshire Arms Apartments opened at 2499 S. Colorado Blvd. in the fall of 1962, it was the tallest building in southeast Denver. It has weathered the past half century like a champ, recently being sold by the family of the original developer for $12.5 million. The 107-unit apartment building, which includes two guest suites, was arguably the most luxurious apartment building constructed in the Mile High City at a time when John F. Kennedy was president, the Denver area’s population was less than a million people (less than half what it is today) and the average price of a gallon of gas was 31 cents. The Rocky Mountain News, heralding the opening in October 1962, described the Wellshire Arms Apartments as a “landmark for Denver’s growing skyline … The building was designed to afford a panoramic view of the Rocky Mountains from almost every one of its units.” Located in the Observatory Park neighborhood and built for $2 million, the building used enough steel to build four Statues of Liberty, 20,000 square feet of glass, 46,509 square feet of wire, more than 10 miles of pipes and enough concrete for 240 driveways. It included luxury features such as the “Skyroom,” a large entertainment room with a kitchen, meeting rooms and a kidney-shaped swimming pool. Each unit had walk-in closets, individual air conditioning and heating controls, and the units were big. The one-bedroom units had 800 square feet of space, plus either a private balcony or patio, and two bedroom units had as much as 1,300 square feet, plus either a balcony or patio. “It was truly a building ahead of its time,” said Terrance Hunt who sold the building along with fellow ARA principal Shane Ozment and ARA associate Andy Hellman. “It was kind of over-the-top for its time, with amenities like its own putting green,” Hunt said. “It actually has these built in desks that today make great desks for computers. It was the only product of its era built to that quality and with so many features and amenities. Honestly, back then it had so many over-the-top elements that no one else was offering, the developer’s competitors all thought he was crazy.” Wellshire Arms was originally developed by Vincent A. Rieger of Rieger Construction Co. The ARA team represented the seller, Wellshire Arms Co. LLLP, which was the original partnership still controlled by the Rieger family. Rieger died almost a year ago, Hunt said. “This is the best value-add opportunity I have seen in the 18 years I have been selling apartments,” Hunt said. “It’s rare to find a property of this vintage resonate this well with today’s tenants. The unit layouts, walk in closets and floor-to-ceiling windows were all ahead of their time.” It was purchased by Bruckal Properties Inc. of British Columbia, Canada. The sales price equated to $119,048 per unit, or $121.38 per sf. George Smith Partners arranged the financing, which included money for renovations and improvements. “The replacement cost, given its level of construction, its location, the underground parking and its high level of concrete slab construction, would be north of $200,000 per unit and probably more than $250,000 per unit,” Hunt said. “Its bones are amazingly good.” Hunt said there was a lot of interest from prospective buyers. “We received more than 15 offers from it,” Hunt said. “A lot of buyers were drawn to it because of its Observatory Park location and its high level of construction, its many amenities and its large units.” The building is of such a high quality that it eventually could be converted into condominiums. “Obviously, that is not going to happen today, given the weak condo market,” Hunt said. “But it could be an exit strategy down the road.” And it does need some work. “This is a 50-year-old building,” Hunt said. “It is showing its age and needs things like paint and some updating. I think it is just this really cool, old-to-modern building that makes a lot of sense to rehab at the fraction of the price that it would take to build new, given the cost of construction and land prices. “The buyer intends to put nearly $3 million into the property, enhancing the amenity package, revamping the units and modernizing the overall look of the property to bring this building to a level that will compete with the newest properties in town.” “The renovated Wellshire Arms will be an attractive addition to South Colorado Boulevard and the Observatory Park neighborhood,” Ozment said. Added Hunt: “By just changing the exterior, including balconies and the color scheme, the buyer will see significant rent increase. Units are now being listed at far below market-level rents.” One thing that hasn’t changed over the decades are the views, Hunt said. “They are spectacular,” Hunt said. “And you really have to hand it to Vincent Reiger to have the foresight to install floor-to-ceiling windows to take advantage of those views.”