It’s a bit like taking home the gold and the bronze.
Last year, Bell Partners paid $255 million for a 1,206-unit apartment community in Superior that it renamed as Bell Flatirons.
That remains the most paid for an apartment community in the Denver area.
Last month, Bell Partners, based in Greensboro, North Carolina, made another big purchase along the U.S. 36 corridor.
Records show Bell paid $116.3 million for the 500-unit AMLI Flatirons in Broomfield.
The community, at 210 Summit Blvd., is across from the Bell Flatirons.
That acquisition marks the third highest price paid for an apartment community in the Denver area this year, according to David Martin of Moran and Co.
Martin and his partner Pam Koster were the brokers on the AMLI Flatirons sale, which Bell is renaming Bell Summit at Flatirons.
Only two Denver communities, the Elan Union Station and Joule, which sold for $154.3 million and $120 million, respectively, have sold for more this year, according to Martin.
The AMLI Flatirons acquisition is the largest purchase along the U.S. 36 corridor this year.
“We are pleased to add this distinctive community to our Denver area portfolio,” said Joseph Cannon, a senior vice president of investments at Bell.
“We were attracted to this investment opportunity due to the combination of Denver’s strong job and population growth, compelling multifamily fundamentals and the value-add opportunity at the community,” Cannon said.
The community was built in 2004.
Bell plans a comprehensive improvement plan focused on apartment interiors and the amenities areas.
It was 95 percent occupied at the time of the purchase.
Koster said Bell was the logical buyer.
“Obviously, they had some good intel on that market, given they owned the community across the street,” Koster said.
“They understand how strong the market is and where it is heading,” she said.
She said there wasn’t as much competition for this property as there is less expensive properties.
“When you have a deal that is over $100 million, there just aren’t as many buyers who can do a deal of that size,” Koster said.
“I would say we probably had seven bids and they were all from good buyers. Very good buyers,” Koster said.
While many prospective buyers in recent years have been from California, most of those interested in this property were from the East Coast.
Two of them have not yet bought in the Denver area, but have been kicking the tires for a while, she said.
Bell is likely now the largest owner of apartment units in the U.S. 36 corridor. For example, it owns about a 1,000 units more than Invesco, which also has staked out a large presence in the Broomfield area.
“That whole Broomfield area has been much stronger than most people thought it would be,” Koster said.
“I think the strength of the market caught everyone by surprise,” Koster said.
“A lot of people thought given all of the new building during the last 24 months that rental rates would decline and occupancies would rise, but that hasn’t happened,” she said.
“They haven’t dipped at all,” Koster said. “Rents are still rising.”
With Interlocken being equidistant between Boulder and Denver, it gives rental properties advantages not found anywhere else in the metro area, she said.
“No place else do you have that kind of proximity to a world-class university,” she said.
The Broomfield and Westminster markets have been beneficiaries of the tight Boulder market.
Rents have been “rising precipitously” in Boulder, if you can find a place to rent at all in Boulder, she said.
With many renters priced out of Boulder, a high-income workforce increasingly is turning to Broomfield and Westminster, she said.
Despite the $116 million sales price, the community is a value-add deal.
“The seller had started an upgrade program and probably had completed about 25 percent to 30 percent of the units,” Koster said.
“So they can still bring about 70 percent of the units up to modern levels,” she said.
Also, despite the price tag, Bell paid below the replacement cost, she said.
Of course, it would be hard to duplicate a community such as this in today’s environment, she said.
“It’s not so much finding the land, but it is becoming more difficult to find construction financing,” Koster said.
The dearth of construction financing will be good news for existing properties, not only along the U.S. 36 corridor, but metrowide, she said.
“What will happen is that we will start to see fewer projects come out of the ground and as they taper off, existing properties will be able to raise rents,” she said.
