Colorado Real Estate Journal - March 16, 2016

Starlight enters Denver market

A Canadian company, in its first Denver-area purchase, recently paid $47.88 million for the 228-unit Carrick Bend apartment community in Northglenn.

Carrick Bend at 1125 Community Center Drive was developed by Holland Partners, based in Vancouver, Washington.

Carrick Bend opened in 2014.

“Holland built it, leased it up and stabilized it and sold it,” said David Potarf.

Potarf was part of the CBRE team that included Dan Woodward and Matt Barnett that sold Carrick Bend on behalf of Holland.

The buyer was Toronto-based Starlight Investments. The sales price equates to $210,000 per unit for the garden-style apartment on nine acres.

The property wasn’t marketed to the overall market.

“Holland had a number and Starlight hit it,” Potarf said.

“If we had shown it to the overall market, we would have had a lot of offers, as we do with all properties these days,” Potarf said.

Not that Starlight stole it.

“They paid a market-rate price,” Potarf said.

“Starlight has wanted to be in the market for a while,” Potarf said.

“They were pretty aggressive in going after this one and kind of made a pre-emptive offer,” which negated the need to shop it to competitors, he said.

CBRE had shown Starlight several communities in the Denver area and this was its favorite, he said.

“They were more interested on the north side of town than the southeast,” Potarf said.

Evan Kirsh, president of Starlight U.S., said the company had been looking to enter the Denver-area market for about a year, before buying Carrick Bend.

“We really like the Denver market,” Kirsh said.

“We find it an appealing market because of its strong employment growth today, as well as the employment growth in the future,” he said.

“And with Denver’s quality of life, it is just a great place to live,” Kirsh said.

He said he is impressed by Carrick Bend.

“First, we really like its location,” Kirsh said.

“It is maybe 20 minutes from downtown, so it can appeal to the resident looking to a less expensive option to housing in downtown Denver, as well as attracting people who work in that suburban corridor,” he said.

The north Denver area itself also is growing, he noted, with a number of employment opportunities.

“We also liked the quality of construction,” Kirsh said.

“Holland did a great job,” he said.

The acquisition checked off a number of boxes for Starlight, he said.

“We only buy new product,” Kirsh said. “We are not a value-add investor. And we only buy in the suburbs. We don’t buy downtown properties.” He also said he thinks “supply and demand” is more in balance in Denver’s northern corridor than in some other parts of the metro area.

Starlight manages assets worth $5.5 billion in its portfolio, which includes 32,500 apartment units in Canada and the U.S.

In the U.S., it also owns properties in Arizona, Texas, Tennessee, North Carolina, Georgia and Florida.

“Carrick Bend probably was a bit on the small side for us, but I would say typically we buy something with at least 200 units,” Kirsh said.

Starlight is looking to buy more apartment communities in the suburban Denver market. “I wouldn’t say we have a target exactly, but I would say that typically we like to own at least 1,000 units in a market,” Kirsh said.


Other News

Denver-based BMC Investments recently paid $50.8 million for the 434-unit Artisan Townhomes and Apartments in Denver.

BMC’s partner in the acquisition is Los Angeles-based Oak Coast Properties.

The seller was Peak Capital Partners, based in Provo, Utah.

“The Artisan property is an acquisition with significant potential because of its strong location and connectivity to a number of destinations,” said Matthew Joblon, CEO of BMC Investments.

“We, along with our partner, plan to extensively improve the property for the long term,” he added.

BLDG Management, the property management company affiliated with BMC Investments, will manage the property that is minutes from the Denver Tech Center and the Interstate 225 light-rail line.

This marks the second acquisition partnership for BMC Investments and Oak Coast Properties, which is a California-based developer, owner and manager of multifamily and hotel properties. “The Artisan also grows our Denver apartments portfolio to over 1,500 units and provides an opportunity for significant upside potential through a renovation plan that capitalizes on rising rental rates, unit demand and lack of new supply in this in-demand region,” said Phillip Nahas, a managing partner at Oak Coast.