Colorado Real Estate Journal - June 3, 2015
Denver-based RedPeak paid top dollar for a trio of newly renovated, infill apartment buildings in Denver’s Capitol Hill neighborhood. RedPeak beat out numerous other bidders by paying $13.85 million for the 43-unit Stanley at 929 Marion St., the 17-unit Bierstadt at 1145 Ogden St. and the seven-unit Crestone at 1153 Ogden St. Records show that RedPeak paid $7.48 million for the Stanley, which equates to $173,837 per unit and $430 per rentable square foot. “By that measure, it was the highest ever paid per square foot for a property of this type,” said Andy Hellman, who was part of the ARA team that sold the properties. “But I think the moral of the story is that it is hard to overpay when you have these type of beautiful properties in these type of great locations,” said Hellman, who listed the properties with fellow ARA Newmark brokers Robert Bratley, Justin Hunt and Kevin Jewitt. The Stanley was built in 1955, but had been totally renovated by the seller, Marion Residential LLC, a group that included a custom homebuilder. “The Stanley already had wide hallways and high ceilings,” Hellman said. The renovation included adding oak floors, granite countertops, dishwashers in units, walk-in closets, crown molding, wood blinds, ceiling fans and thermostats in each units. The renovation also included a new roof, evaporative cooling, a high-effiency boiler, and Anderson low-e, double-paned windows. The electrical system also was upgraded. The Stanley has 28 studio units of 331 sf each, with average monthly rents of $950. It also has 15 one-bedroom, one-bath units with 541 sf each, with monthly average rents of $1,300. It is within blocks of Cheesman Park, minutes from downtown and has an 84 Walk Score. It is within a half-block of a King Soopers/Starbucks, Dazbog Coffee, Einstein Bros. Bagels and other restaurants and retail shops. The Stanley includes 31 parking spaces. The Bierstadt and Crestone are next to each other. “The Crestone was built in the late 1800s and was taken down to the original brick and studs and was gutted,” Hellman said. “I’d hesitate to even call it a renovation,” Hellman said. “It was a true construction project. And it is beautiful.” The Crestone has six onebedroom units with 583 sf each. They rent for $1,315 a month. The Crestone and Bierstadt sold for $6.38 million, or $277,174 per unit and about $393 per sf. The units are in part of Capitol Hill with a Walk Score of 87 and they are a half-block from Whole Foods. They also are an easy walk to restaurants including Snarf’s Sandwiches, Park Tavern, Potager and Sexy Pizza. The property includes 13 offstreet parking spaces. “These strategic and seamless acquisitions bring RedPeak’s ‘Urban Living Portfolio’ to 730 units in 17 buildings in Denver’s most walkable neighborhoods, and our total Colorado portfolio now consists of 2,445 units,” said Bobby Hutchinson, RedPeak’s investment director. “In addition, we have recently broken ground on an eightstory, 115-unit apartment building located at (East Seventh Avenue and Sherman Street) in the Governors Park neighborhood, which we expect to deliver next summer, and have recently completed a substantial renovation of a 32-unit historic property at 970 Pennsylvania St.,” he continued. “We continue to look to expand upon our growing presence in Denver’s highly desirable urban neighborhoods,” Hutchinson said. Capitol Hill had a 5.4 percent vacancy rate in the first quarter, according to the Apartment Association of Metro Denver. That is higher than the overall metro vacancy rate of 4.9 percent. However, once again, that doesn’t tell the story of the Capitol Hill market, Hellman said. “In Capitol Hill, that includes new, big buildings that are just coming on the market and in the lease-up stage,” Hellman said. “Buildings with 100 to 199 units had a 13.4 percent vacancy rate in the first quarter,” Hellman said. “But the vacancy rate for those building was about 20 percent in the fourth quarter, so the vacancy rate already has dropped substantially in just one quarter. And if you look at buildings with 30 units or less, the vacancy rate was 2.7 percent in the first quarter.” He said there was huge demand for the buildings. Some buyers wanted to buy all of them, and some just wanted to buy the Stanley, and some wanted to buy the Bierstadt and the Crestone. “We never really thought of splitting the Bierstadt and the Crestone,” Hellman said. In addition to the quality of the buildings, Capitol Hill is “redhot,” Hellman said. “Honestly, there is more investor interest in Capitol Hill than we have ever seen,” Hellman said. “The problem is that there just isn’t very much available to buy.” Millennials who can’t afford to live in new buildings downtown, are drawn to the less expensive Capitol Hill with its mix of new and old buildings, as well as trendy restaurants and bars, he said. RedPeak, he said, was the perfect buyer for the buildings. “This is RedPeak’s bread and butter to buy these type of highclass buildings that really will withstand the test of time,” Hellman said. RedPeak is actively seeking high-quality apartment buildings in central Denver. It is willing to pay top market prices for assets that fit the company’s target criteria.
-An unidentified buyer paid $3.14 million, or $101,210 per unit and $95.87 per square foot, for Jewell Park, a 31-unit apartment building built in 1971 at 8983 W. Jewell Ave. in Lakewood. Josh Newell, a senior adviser at Pinnacle Real Estate Advisors LLC, represented both the local seller and buyer in the transaction. -In another deal in which Newell represented both the local seller and a buyer, an unidentified investor paid $615,000, or $102,500 per unit, for a six-unit apartment building at 1537 Pearl St. in Denver The building, built in 1900, sold for $185.68 per sf.