Colorado Real Estate Journal - April 5, 2017
A Beverly Hills, California based buyer made its first Denver acquisition with the purchase of the Villas at Holly. Triumph Properties Group, a commercial real estate investment, management and development firm, paid $26.25 million for the 144-unit apartment community at 6760 S. Glencoe St., at the corner of Arapahoe Road and Holly Street in Centennial. The Villas at Holly transaction was closed on an all-cash basis in 37 days. “We like Denver over the long term and Villas at Holly presented us with an opportunity to gain entry into a high-quality submarket at attractive relative pricing and a clear opportunity to increase income by improving unit interiors,” said Will Roos, Triumph’s director of acquisitions. “It’s really just a good suburban location with not a lot of new product in the immediate area and is located behind a King Soopers grocery-anchored center and within the Littleton Public Schools district,” added Terrance Hunt of ARA Newmark, who represented seller Kennedy Wilson with ARA Newmark’s Shane Ozment, Jeff Hawks and Doug Andrews. Triumph Properties Group plans to improve the community with unit interior upgrades, and exterior and common area additions. Constructed in 1979, the Villas at Holly features a mix of one-bedroom, one-bath; two-bedroom, two-bath; and two-bedroom, two-bath-and-a-den floor plans. The community includes an outdoor pool, fitness center, pet park and business center. At the time of sale, it was 95 percent occupied. The purchase of Villas at Holly is part of Triumph Properties Group's continued expansion of its acquisition platform with $150 million to $200 million in acquisitions targeted over the next 12 months. It currently is seeking multifamily properties across all major U.S. markets that are 100-plus units, in solid A/B submarket locations, $15 million to $100 million-plus in deal size and preferably 1980s and newer vintage. Triumph Properties Group is a long-term owner and investor. Its portfolio includes approximately 2,000 apartment units, 1 million square feet of commercial properties and various development sites around the country. Other News Pinnacle Real Estate Advisors LLC handled a number of multifamily transactions in the Denver metro area, including the sale of 1260 Pennsylvania St. in Denver. The 25-unit Capitol Hill property sold for $3.6 million, or $144,000 per unit. Kevin Calame, along with the Calame|Lewallen Team at Pinnacle, represented both the buyer and seller in the transaction. “The sellers had the opportunity to purchase the property at a below-market value and turn for a decent profit in only eight months,” said Calame. The firm also handled the sale of 310 W. Archer Place in Denver. The 17-unit community, constructed in 1965, was “significantly” renovated in 2012. Located in the Baker neighborhood, the community sold for $3.16 million, or $185,765 per unit and $353.60 per square foot – a record-high price per sf for the neighborhood. Robert Lawson and Jim Knowlton of the firm’s Knowlton|Lawson Team and Joe Hornstein and Scott Fetter with the firm’s Hornstein|Fetter Apartment Group represented both the buyer and seller in the transaction. “The buyer recognized this opportunity to get into the Baker apartment market due to both the demographics of the neighborhood and the few competing apartment buildings that serve it. This property is walking distance to the thriving South Broadway bar/restaurant scene, and it’s also walking distance to light rail. Simply put, it’s a great building and a great location,” said Fetter. “The buyer assumed the seller’s current loan, therefore saving the seller a significant prepayment penalty, which accounted for the difference from the list price and the closing price,” added Lawson. Additionally, a 16-unit property at 1960 Eaton St., located off Sheridan Boulevard and West Colfax Avenue in Sloan’s Lake, sold for $2.73 million, or $170,313 per unit. Fetter represented the buyer in the transaction. “As renters struggle to keep up with prices in Denver, we're seeing two things,” said Fetter. “First is more demand for two bed units and second is a shift out of central Denver. This property capitalizes on both of those trends. The units are large and the area is quickly transitioning with the rest of Sloan’s Lake. The buyer got a great loan and a new roof from the seller, so he is well positioned on this purchase.” Also, Josh Newell, a senior adviser with the firm, represented both the local seller and buyer in the disposition of 8220 W. 16th Place in Lakewood. The 18-unit property sold for $2.7 million, or $150,000 per unit and $164.21 per sf. Marcus & Millichap recently released its 2017 U.S. Multifamily Investment Forecast in which it noted that job gains and limited single-family home options have driven households to apartments in the Denver metro area. The report noted not only that the tight single-family housing market has not only extended tenures in rentals but also that home prices have risen faster than rent and the median household income over the past several years, resulting in a strong demand for apartments. This demand, according the Marcus & Millichap, also has spurred builders to add more than 30,000 units to Denver’s inventory over the past four years. The firm anticipates deliveries to remain elevated this year and supply additions will outpace demand, yet the vacancy rate could remain below early 2000 levels. Marcus & Millichap also noted that “low vacancy and solid rent gains for Class B and C properties have encouraged private, local buyers to be most active in the market. Sales of these assets are dominating deal flow, placing upward pressure on prices, with opportunities in the core changing hands at cap rates in the low- to mid-5 percent area.” Buyers seeking upside potential will look for opportunities in suburban areas, which have more affordable rent, the report added. Additionally, sellers are reinvesting in higher-yield opportunities elsewhere in the metro area or in Colorado Springs.