Colorado Real Estate Journal - March 1, 2017
BMC Investments and Oak Coast Properties partnered in the $40.5 million acquisition of a Thornton apartment community. “The acquisition of Timber Lodge Apartments brings our regional portfolio to 2,785 units,” said Phillip Nahas, Oak Coast Properties’ managing partner. “As one of the country’s top 20 MSAs with a current unemployment rate well below the national 5.8 percent average at 3.9 percent, we remain bullish on housing in Denver and will continue to pursue additional acquisition opportunities.” The purchase of Timber Lodge Apartments represents Oak Coast Properties’ fifth acquisition in the metro Denver marketplace and fourth in partnership with BMC. The 390-unit community at 1769 Coronado Parkway North was sold by Investors Management Group. Timber Lodge features a mix of studio, one- and two-bedroom floor plans ranging from 530 to 1,000 square feet. Units include air conditioning and ceiling fans with select units also featuring wood-plank flooring and walk-in closets. Community amenities include three swimming pools, a fitness center, soccer field, dog park, playground, picnic areas with barbecues and a business center. The location of Timber Lodge was attractive to the new ownership, noted Nahas. The property is situated in a region exceeding 7 percent rent growth year over year every quarter since second quarter 2013, and several northern Denver submarkets have placed moratoriums on future apartment development. In addition, high utility tap costs, impact fees and some of Denver’s highest land prices have resulted in prohibitive cost and difficulty in delivery of new development. No market rate communities like this have been delivered within a 2-mile radius of Timber Lodge Apartments in the last 13 years. “As Denver’s population continues to climb at record speed and housing supply remains constrained, the opportunity to drive rent growth in quality communities such as Timber Lodge Apartments is strong,” added Nahas. “An estimated 25,000 new renters are driving up demand annually in Denver and no new affordable supply is coming on line to meet it.” At the time of sale, Timber Lodge was 94 percent occupied. Built in 1972, the property underwent $6.9 million in capital improvements, with many of the units fully renovated. Oak Coast will start this month on additional capital improvements to the property, including painting hallways, boiler work, parking, landscaping and amenity spruce-up as a means to increase occupancy and drive rental rates upward. BLDG Management, the property management firm affiliated with BMC Investments, will manage Timber Lodge Apartments. Shane Ozment, Terrance Hunt, Jeff Hawks and Doug Andrews of ARA Newmark handled the transaction. Brock Yaffe and Charles Halladay of Holliday Fenoglio Fowler LP’s debt placement team assisted in securing a $13.81 million supplemental loan for the buyer through Freddie Mac’s CME Program. The securitized loan will be serviced by HFF. BMC Investments and Oak Coast Properties previously purchased the Liberty Creek apartments in Aurora for $65 million and The Artisan Townhomes and Apartments in southeast Denver for $50.8 million. Headquartered in Los Angeles, Oak Coast is a developer, owner and manager of multifamily and hotel properties and is pursuing Class B and C multifamily properties and hotel properties for the implementation of a valueadd, long-term hold investment strategy. It is targeting properties across the Eastern seaboard, Pacific Northwest and Western U.S., including Denver. Denver-based BMC Investments is a real estate investment company specializing in the development, acquisition, redevelopment and, ultimately, disposition of different product types throughout the United States. Other News GHC Housing Partners, the nation’s third-largest affordable housing owner based on number of units owned and managed, added to its holdings with the $19.5 million acquisition of a Capitol Hill portfolio. Local group Hudson Grove Property Management sold the 121-unit portfolio at a price of $161,157 per unit. The project based Section 8 housing comprises a mix of properties built from the turn of the century to the 1920s. Jules Hochman and Justin Brockman of Pinnacle Real Estate Advisors represented the buyer and seller in the transaction. There are around five years left on the current contract, however, the new buyer looks to renegotiate the affordable housing contract with the U.S. Department of Housing and Urban Development. The buyer, Hochman noted, is expected to rehab the units up to market-rate standards. Pinnacle Real Estate Advisors also recently handled a number of other multifamily sales across the metro Denver area. The eight-unit property at 1475 S. Pierce St. in Lakewood recently sold for $1.35 million, or $168,750 per unit. The property, which includes eight detached garages, sold in a 1031 exchange. Jeff Johnson of the Johnson Ritter Team assisted both the buyer and seller in the sale of the property, constructed in 1951. “The property had been completely renovated by the seller, providing the buyer with a truly turnkey asset. Additionally, the huge unused portion of the lot has the potential for future redevelopment,” said Johnson. An eight-unit property at 3435 W. Fourth Ave. in Denver also recently sold for $880,000, or $110,000 per unit. Eric Veith along with the Hornstein|Fetter Apartment Group represented the buyer in the transaction. “The buyer sold a small income property and was interested in re-leveraging his equity into a long-term apartment asset,” said Veith. “The fundamentals of the property are great and we expect the new owner to do very well in the long term.” The property was built in 1954. A four-unit property in Westminster recently traded for $585,000, or $146,250 per unit. The property at 7320 Tennyson St., located 1 mile from the new Westminster light-rail station, features large, two-bedroom townhome style units with in-unit washers/ dryers, private patios and off-street parking. “The seller is planning to do a tax deferred 1031 exchange into a larger multifamily property to increase his cash flow,” said Chris Knowlton, who, along with Jim Knowlton and Robert Lawson of the firm’s Knowlton Lawson Team, represented the seller. Tim Shunta and Jerry Kendall of Colorado Realty Advisors recently represented both sides in the sale of the 20-unit Cricket Townhomes in Aurora. The buyer paid $4.35 million, or $217,500 per unit, for the community at 2000 S. Paris Way in Aurora. The sales price for the community with an average townhome size of 1,571 square feet was possibly a record for this type of property, noted Kendall. There was a $112,500 credit for repairs and maintenance. The buyer and seller were not disclosed. A seven-unit multifamily property in Denver recently traded for nearly $194,285 per unit. Greystone Unique Apartment Group, a multifamily division of Unique Properties Inc., brokered the sale. The property at 2800 Larimer St. sold for $1.36 million. Built in 1885, the property comprises entirely one-bedroom units averaging 595 sf. The unnamed seller had renovated all of the units with modern finishes, including new hardwood floors, kitchen countertops and updated bathrooms. The location was a key attraction for the buyer as was the turnkey condition of the asset, according to the firm.