Los Angeles-based real estate investment and asset management firm Gelt Inc. grew its Denver holdings with its purchase of a niche product in the market.
Gelt paid $61 million for Timber Lodge, a 390-unit, value-add, affordable apartment community at 1769 Coronado Parkway in Thornton.
“With the market unable to add new units that can charge rental rates at an affordable price point, older properties like Timber Lodge fill the affordable void,” said Newmark Knight Frank Multifamily’s Terrance Hunt. “This has created strong rental demand and high occupancy for an asset of this vintage. These strong fundamentals combined with very attractive available debt have led to tremendous buyer demand.”
Hunt, alongside Newmark Knight Frank Multifamily’s Shane Ozment, provided strategic services to the seller, Denver-based investment company BMC Investments.
Constructed in 1972, Timber Lodge is situated on 12.59 acres and comprises 15 two-story buildings with basements. Timber Lodge features a mix of studio, one- and two-bedroom units.
“Although this property has been well-maintained and updated in key areas, Gelt saw this as a prime opportunity to add value by embarking on a strategic renovation of all the unit interiors to include modern finishes such as new stainless steel appliances, vinyl flooring, new plumbing fixtures, two-tone paint, painted cabinets and new light fixtures,” said Josh Satin, director of acquisitions with Gelt. “We also will be expanding the gym, adding a new dog park and soccer field, paving all the roads and adding Amazon package lockers, among other upgrades.”
“We like the Thornton submarket because of its proximity to major employers located along the I-25 corridor, while also being 15 minutes from downtown Denver,” said Jeff Harris, partner with Gelt.
“Timber Lodge’s strategic location within the Thornton/ Northglenn apartment submarket further enhances its desirability,” added Ozment. “The northern markets have high barriers to entry, making it difficult to build new apartment complexes. Additionally, the vacancy within the submarket has compressed 3.1% year over year. As a result of tight vacancies, effective rents grew 4% over the past year to $1.57 per square foot.”
Timber Lodge also is located less than five minutes from the future Thornton and 88th commuter rail station and minutes from major employment centers, as well as near some of metro Denver’s newest retail and entertainment options, such as Thorncreek Crossing and The Denver Premium Outlets.
Timber Lodge features units that average 709 square feet. Community features include two swimming pools, a fitness center, business center, playground, barbecue area, soccer field, dog park, carports and an on-site laundry facility. The community also features a recently renovated clubhouse as well as access to Rotella Park.
It was 96% occupied at the time of closing.
In addition to the acquisition of Timber Lodge, Gelt also recently sold the Westhills Apartment Homes in Lakewood for $92 million. (See story Page 10).
“Over the past few years, Denver has become our top market for acquisitions, and we are looking to continue expanding our footprint there over the next 24 months,” added Danny Orland, Gelt director of investments.
Gelt owns approximately 2,000 units in five communities across the Denver metro area.