A San Francisco-based company recently paid $150.5 million for two luxury apartment communities in the Denver area.
In the largest of the two deals, Braddock & Logan Venture Group paid $78 million for the 300-unit Watermark at Southlands community at 24631 E. Applewood Dr., in Aurora, according to public records.
It also paid $72.5 million for the 250-unit Outlook Meadows at 4560 W. Mineral Ave. in Littleton.
The ARA Newmark team of Jeff Hawks, Doug Andrews, Terrance Hunt, Shane Ozment, Anna Stevens and Amanda Meldrum, marketed and sold both communities.
The $290,000 per unit paid for the Outlook Meadows is the most ever paid for a non-core, garden-style apartment community in the Denver area, according to ARA Newmark.
The Watermark at Southglenn sold for $260,0000 per unit.
“This is a unique property,” Hunt said about the Watermark.
“It is what is known as a ‘big house’ concept,” Hunt said.
The average size of a unit is about 1,100 square feet, far bigger than the vast majority of recently built apartment communities.
“This is a brand new property and is in lease-up,” Hunt said.
“This is more like towhome living than apartment living,” he said.
It was built by Waterman JSQ at Southlands. The parent company is based in Indianapolis.
“Some developers like to build something and get out,” Hunt noted.
John Winslow, principal of Winslow Property Consultants, wasn’t involved the deal, but said it is truly a Class-A development.
“This is one of the nicest apartment complexes in Aurora,” Winslow said.
He said the demographics in the area are strong, with the average household income in the area “north of $100,000.”
Southlands Mall and E-470.
Hunt said there was lot of interest from prospective buyers.
“We received about 10 solid offers,” Hunt said.
“Braddock & Logan was pretty motivated to win this one,” he said.
The big units were appealing to Braddock & Logan and the other prospective builders, as well as it being adjacent to the Southlands Mall.
“It’s like having 1.7 million sf of walkable retail out your door,” Hunt said.
He said that Braddock & Logan probably paid close to the replacement cost, but that is a moving target.
“Prices are going up 1 percent to 1.25 percent per month,” with ever rising labor and land costs, he said.
“And keep in mind, that Aurora charges fees of $20,000 per unit, so that helps to create a very strong barrier to entry,” Hunt said.
“There just isn’t very much Class A properties in the area to compete with it and given the rising costs, it will be increasingly difficult to justify new construction,” Hunt said.
Separately, Braddock & Logan bought the Outlook Meadows from Evergreen Development.
Evergreen Development completed the construction of the community lat year.
It marked Evergreen’s first Denver-area sale, although its principal, Jeff Wikstrom, has been a successful developer in the metro area for the past three decades.
“The property generated tremendous interest because of the lack of apartments in the entire southwest metro submarket,” Hawks said.
“In fact, our records show only six new properties in this sector in 25 years and only three other trades,” Hawks added.
Many of the suburban apartment communities command high prices when they are near light rail stations.
That is not the case with the Outlook.
“Although Outlook isn’t located on a transit-oriented or core site, a strategic combination of timing, location, quality and adjacency to Dunkin’ Donuts resulted in record pricing.”
David Lee, Director of Investment Real Estate for Braddock and Logan, stated, “As a long-term owner, our objective in entering the market has been to purchase new, well-located multifamily assets that will endure both economic and construction cyclicality. Outlook Littleton is a very well built community in a location with high-wage earners, expensive single-family housing and mature neighborhoods that will remain a desirable place to live for decades to come.” Braddock and Logan is a diversified real estate development and property management company based near San Francisco.
