"This is the most amount of money - in total dollars - that has ever sold," Jeff Hawks, a Grubb & Ellis Co. senior vice president who co-brokered the sale, told GlobeSt.com. "A recent purchase by Legacy Partners in Cherry Creek sold for more per unit, but that was a much smaller complex." The Lowry project had sold for $123,671 per unit and $130.54 per sf.
Doug Andrews, a Grubb & Ellis land specialist teaming with Hawks on the sale, says the complex is well worth the price. The property is situated at the former Air Force base on Denver's east side, which is being converted into a mixed-use project. "With the development of Jefferson Estates at Lowry a new era has begun in Denver," Andrew says. "Amenities and features of this property have never been seen before in the metro Denver apartment market."
AMLI has renamed the property AMLI at Lowry Estates. A 50-50 joint venture between AMLI and an institutional partner is the new owner. If certain benchmarks are reached, AMLI Residential will receive an increased portion of the residual interest.
Capri Capital, on behalf of FNMA, has provided permanent-loan financing for the acquisition. The interest rate is 7.12%, with a seven-year term. The loan is amortized over 30 years. The project sits on 18 acres in the southwest quadrant of Lowry.
It consists of 392,208 rentable sf in 22, three-story buildings. The average size of a unit is 947 sf.
Amenities include two resort-style swimming pools with heated spas, state-of-the art cardiovascular fitness center, resident business center, media room and eight-hole putting green. Units have nine-foot ceilings, crown molding, tile entries, oversize oval garden tubs, vaulted ceilings, built-in computer desks and shelves, gourmet island kitchens and other features typically found in custom homes.
"We are excited about entering the Denver market," says Allan Sweet, AMLI president. The community is located "in one of the premier urban redevelopments in the country," he says. "Adding another market to our portfolio is consistent with our long-term business plan to diversify our earnings and to reduce AMLI's exposure to any one region."
Sweet also likes the long-term economic fundamentals of the Denver metro area. "We view the mountain region as a natural extension of our operations in the Midwest and Southwest," he says. AMLI has plans for other Denver-are buys. "Over time, we will seek to broaden our presence through development," he says.
AMLI's portfolio includes 62 apartment communities with 24,282 units. An additional 4,142 units are under construction or being leased in 14 locations.
Hawks says the sale is the third luxury apartment complex to sell this year and two more are about to close. The region is fetching a per unit price of more than $115,000. "The demand for quality rental communities has moved Denver into one of the top rental markets in the country for quality apartment living," says Hawks. "AMLI has told me that the excellent job opportunities in Colorado combined with the lack of new construction and barriers to entry for future apartment development makes Colorado a good opportunity for apartment investment."
Andrews agrees with AMLI president Sweet that this is the beginning, not the end for the company in Denver. "You will be hearing more about AMLI in the future," predicts Andrews.
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