The Boulders achieved what appears to be a record price for a 1990s apartment community, giving the buyer a unique opportunity to add value in a high-barrier-to-entry market.
Global real estate company Heitman paid $62.5 million for the 161-unit community at 2850 Kalmia Ave. in Boulder. The price per unit, $388,199, is believed to be the highest paid for a 1990s community on the Front Range.
“It’s a gorgeous property. I think the buyer will do extremely well with the asset,” said Shane Ozment, vice chairman with Newmark Knight Frank Multifamily.
“This was a fantastic opportunity to purchase an insulated asset in a core market,” added NKF Vice Chairman Terrance Hunt, who handled the sale with Ozment and NKF’s Justin Hunt and Andy Hellman. “Demand for multifamily is exploding in Boulder because of the high cost of single-family homes, development constraints and demographics favoring renting over buying.”
The Boulders, built in 1993, is one of only three apartment communities completed in Boulder in the 1990s and the only one that hasn’t been completely renovated, according to Ozment. It includes 120 two-bedroom, two-bath units and 41 one-bedroom, one-bath apartments.
The seller, Broadshore Capital Partners, renovated 67 units, boosting rents on those units by $150 to $250. Another 94 units had been partially renovated.
Through continued renovations, “You could easily raise your rents $250 to $300 and still sit well below” the market for newer, more urban product in Boulder, Ozment said. Plus, “It’s a big site. It’s all trees and grass, which you just don’t get in Boulder.”
Even with the highest rents in the Denver metro area, the Boulder apartment market has maintained average occupancy of 95% over the past 10 years. The average list price of a single-family home is $1.77 million, while annual household income averages $109,000.
The city currently is seeing a surge of new apartment development, with an estimated 900 units coming on line. But given the stringent entitlement process and lack of available development sites, “When you look at the landscape of the Boulder market, what it shows you is it’s going to be very challenging going forward to add any new product in the market,” Ozment said.
There were 25 offers for The Boulders, located just off 28th Street and the Diagonal Highway.
“I firmly believe it’s the very best located deal in Boulder because you’re five minutes from everything,” he said.
The Wonderland Creek Greenway Trail runs through the property, which is close to employers including Ball Aerospace, Lockheed Martin, Apple and Google. The Boulders is within a 15-minuet bike ride of the University of Colorado, Pearl Street Mall and Twenty-Ninth Street.
All apartments at The Boulders have gas fireplaces, walk-in closets, and patios or balconies. The community has a 24-hour, state-of-the-art fitness center and yoga room, a year-round heated pool and a large dog park.
One other 1990s Boulder apartment community, The Hive (formerly Brookside), sold for $409,733 in 2016, but that was part of a portfolio deal that included 18 properties, according to Apartment Insights. The property sold again last year for $354,167 per unit.