The late Steve Jobs, the co-founder and former CEO and chairman of Apple, once said, “A lot of times, people don’t know what they want until you show it to them.”
Darren Fisk, CEO and founder of the Denver-based Forum Real Estate Group, has a similar philosophy when it comes to developing apartment communities.
That philosophy paid off well, when Forum recently sold the five-story, 362-unit Veranda Highpointe Apartments to Los Angeles-based TruAmerica Multifamily for $105 million.
The sale of the property at 6343 E. Girard Place marks the fourth largest ever in Denver, according to data from appraiser Cary Bruteig.
Only the Breakers Resort, Lex at Lowry and Uptown Square have sold for more, shows Bruteig’s research.
Forum completed the development of Veranda Highpointe in 2014.
Before a spade of dirt was turned, Fisk and others at Forum hung around places like the nearby Whole Foods to ask them what they would like in a nearby, luxury Class A apartment community.
“We do that in all of our developments,” Fisk said.
“We try to really understand the sentiments of our demographics, so we really immerse ourselves in the area and come up with a branding notebook with each of our projects that we share with our architects and engineers,” Fisk said.
And, then there is providing what people don’t know they want.
For example, Veranda Highpointe includes a lazy river swimming pool.
“Actually, that is something I had seen in a hotel in Mexico and I thought it would be cool to bring it to Denver,” as an amenity no other community was offering, he said.
“Whenever we are traveling, we like to look at what hotels are offering as far as amenities, as we look at our apartments like they were boutique hotels,” Fisk said.
A two-story clubhouse, state-of-the-art fitness center, a yoga studio, sports court, community kitchen, dog walking path, rooftop lounge and structured parking are amenities at the property. The Southmoor Light Rail Station also is less than a half-mile from the property.
Fisk said he is so thrilled with how Veranda Highpointe turned out that he had mixed feelings about selling.
“It was a hard one to let go,” Fisk said.
However, given the strength of the apartment market and new supply coming online in the nearby Denver Tech Center area, it was a good time to sell, he said.
Forum was represented by the CBRE team of David Potarf, Dan Woodward and Matt Barnett in the sale.
“This was a fun one,” Potarf said.
There was a great deal of interest from prospective buyers, he said.
“We gave quite a few tours and ended up with quite a few good offers,” he said.
In addition to its amenities, its location was a big selling point for TruAmerica and others competing for the property, he said.
“It really is geographically in the center of everything,” Potarf said.
“From there, you can easily go downtown or the tech center or Aurora or Lakewood,” Potarf said.
The community takes gets its name because it is one of the highest points in Denver.
“You have great views, especially from those looking to the west,” Potarf said.
Prospective buyers also were impressed by the quality of the construction, he said.
“Forum builds a really nice product,” Potarf said.
“There is a lot of attention to details,” he added.
While the quality is as good as anything being built downtown, rents are considerably less expensive, he said.
Rents average $1.95 per square foot at Veranda Highpointe, according to Bruteig’s Apartment Insights database. Some recently built apartment buildings in downtown command rents north of $3 per sf.
“Millennials make up approximately 40 percent of the Denver workforce and population, yet many have been priced out of most of the urban areas where young urban professionals typically would like to live,” according to Noah E. Hochman, senior managing director of acquisitions and investor relations for TruAmerica.
“This was an opportunity to acquire a high-quality asset in an infill location that was built and priced to appeal to Denver’s largest demographic,” Hochman said.
With the purchase, TruAmerica’s Denver-area portfolio has 2,037 units.
“Veranda is a prized asset in one of Denver’s most desirable areas, and we can improve operational efficiencies through our vertically integrated asset and construction management platform,” Hochman said.
“We will also undertake selective capital improvement projects and enhance the unit interiors with higher end finishes and additional high-tech features for residents,” he added.
“The property has more amenities than any other building in the neighborhood and we want to make sure these are activated with good resident programming that will provide a sense of community,” Hochman added.
Chicago-based Capri Capital Partners is TruAmerica’s partner in the purchase.
“Capri’s investment strategy for this particular client is to invest in multifamily properties on a diversified basis across the U.S., focusing on core and value-add opportunities in high barrier-to-entry markets witnessing strong demographic and economic trends,” said Dori Nola, an investment partner at Capri.
“The acquisition of Veranda is consistent with this strategy,” she said.
“The sale of Veranda Highpointe marks Forum’s fourth ground-up development disposition in the Denver area,” Fisk said.
“We are very proud of this residential community and the incredible attention and recognition this asset has garnered over the years,” he continued.
“From the signature ‘lazy river’ amenity to the high level of custom finishes and details throughout the property, we put a lot of heart and soul into designing and developing Veranda Highpointe and could not be happier with the end result,” Fisk said.
He said he is confident that Capri and TruAmerica “will continue to deliver superior service and the kind of living experience that Veranda is known for,” he said.
Fisk said he remains bullish on Denver and the local economy.
“We bought the land for the Veranda Highpointe in 2010, so our timing was pretty good,” Fisk said.
“We can’t afford to build in Denver right now, because construction costs and land prices have gone up so significantly,” Fisk said.
“But I do think Denver has a very bright future.”
Featured in CREJ’s Jan. 20-Feb. 2 issue
