A Los Angeles-based regional real estate investment and asset management company made its largest acquisition ever with the $107 million purchase of a Lakewood apartment portfolio.
Gelt Inc. paid nearly $184,500 per unit for the two-property portfolio comprising 580 units.
“This transaction is Gelt’s largest since our inception in 2008 and we have now acquired more than 6,700 units valued in excess of $1 billion,” Keith Wasserman, partner with Gelt, said in an announcement regarding the transaction. “We are thrilled with these milestones, but plan to keep moving forward by acquiring an additional $500 million over the next 12 months.”
The portfolio comprises adjacent properties: Ascend at Red Rocks, a 408-unit community at 13105 W. Second Place, and Elevate at Red Rocks, a 172-unit property at 409 Zang St.
“With one asset built in 2000 and the other built in 1981, we liked this stabilized portfolio’s blend of newer and older product, which subsequently offers two different rental price points,” said Jeff Harris, chief operating officer with Gelt. “Buying two assets immediately adjacent to each other also allows us economies of scale on our expenses, not to mention building scale to our already existing Lakewood portfolio, which now totals 980 units in three properties.”
Gelt, according to Harris, plans to add value by upgrading units that weren’t previously renovated by the former ownership. Plans include the installation of vinyl plank flooring, stainless steel appliances, fixtures, and washers and dryers.
At Ascend, the older of the two properties, the new ownership plans to update the gym while a dog park, sports court and a gazebo/lounge barbecue area will be added. Gelt also plans to modernize the existing leasing office, clubhouse and playground at Elevate.
The portfolio, sold by FPA Multifamily, a private equity real estate firm focused on the acquisition, renovation and management of both core plus and workforce housing apartment communities, saw a significant amount of activity.
“The high level of interest generated by the properties shows a strong, continuing demand for value-add assets in the Denver market,” noted David Martin of Moran & Co., who brokered the transaction on behalf of both the buyer and seller with Moran & Co.’s Pamela Koster.
Occupancy at the time of sale was 95 percent.
The properties also boast a location just minutes from the Union Boulevard-Denver Federal Center area, the largest employment center in Lakewood.
Ascend at Red Rocks, built in 1981, is situated on a 16.54-acre site. The community includes one-, two- and three-bedroom apartments ranging from 850 to 1,260 square feet. The property features a 24-hour fitness center, heated swimming pool, recently renovated clubhouse, media and business center, volleyball court and laundry rooms.
Constructed in 2000, Elevate is situated on 9.57 acres. The apartment community also comprises one-, two- and three-bedroom units, which range from 673 to 1,101 sf. Elevate’s community amenities include a 24-hour fitness center, heated swimming pool, clubhouse, media and business center, volleyball court, barbecue grills and laundry rooms.
Gelt, which seeks to acquire properties in strategic markets in the Western United States, also owns the 400-unit Westhills community in Lakewood and the 564-unit 3300 Tamarac apartments in Denver.