CREJ - Multifamily Properties Quarterly - October 2015
You might be surprised at the variety of answers you would receive if you asked a group of seasoned apartment owners what was their favorite vintage of apartment buildings to own. It would be similar to the range of answers you might receive if you asked wine connoisseurs what kind of wine they would choose if they could only drink one for the rest of their lives. We set out to ask this very question: What is your favorite apartment building decade? Following, some of Denver’s own multifamily investment gurus discuss their favorite type of vintage apartment community As expected, there is a plethora of compelling viewpoints. Josh Mullins, director of acquisitions at the quickly growing Laramar Associates, prefers properties built in the 1960s. These buildings offer efficient floor plans because, while small, they feel larger and can command premium rents, Mullins said. One of the other advantages of pursuing 1960s properties is that owners don’t encounter as much aluminum wiring, he said. Bobby Hutchinson of Redpeak Properties, which has a large collection of vintage apartment buildings in central Denver, likes how residents perceive living in an older, smaller property and the intimate community these buildings provide. His favorite decade of vintage buildings is from the 1950s. These buildings have better electrical systems, bigger units and unique masonry construction, he said. Cornerstone Apartment Services manages more vintage apartment buildings in central Denver than any other company. The firm groups vintage properties into five classifications to make managing similar properties easier – steam heat buildings; 1940s and 1950s interior hallways; prestressed concrete buildings; 1960s and 1970s interior hallways; and outside walkups. Jim Lorenzen, president and founder, enjoys the additional details that went into some of the older buildings found in Denver, such as the intricate window treatments, gargoyles, unique masonry work and additional windows. He named the Avon Apartments near East 13th Avenue and Detroit Street as his favorite vintage apartment building in Denver. He appreciates the classic architecture and quintessential two- and three-bedroom layouts that feature a formal dining room, he said. There was one thing all these experts, and most renters, agree could be improved about the vintage apartment supply in Denver – parking. Nearly every vintage building could use more parking, they said. Other items to consider with vintage properties include lead paint, asbestos and antiquated electrical systems. Vintage apartment buildings are an investment class all their own, and it takes a seasoned expert to know which are solid and which are lemons. Most brokerage teams have decades of experience working with the best and brightest minds in the apartment industry. Multifamily investment brokers are skilled problem-solvers with access to a wealth of resources and best practices. Teaming up with knowledgeable advisers can open an entirely new investment avenue – and maybe a bottle of wine or two.