(Read more on the multifamily market .)
DENVER-Asset manager JP Morgan has acquired a 337-unit urban apartment complex here from Cornerstone Real Estate Advisors for $75 million, according to the listing broker, Moran & Co. The asset, Commons Park West, sits on the Platte River across from Commons Park, which it is connected to via a pedestrian bridge. The two-building four-story property is 100% leased and includes 9,000 sf of street-level retail.
Broker David Martin tells GlobeSt.com that the price per sf on the deal, $265, is the highest ever paid for an institutional multifamily property in Colorado, high rises included. The cap rate on the deal based on trailing 12-month numbers is approximately 3.8%, but Martin says current rents that can be achieved should allow the new owner to push that to 4.75% over the course of the next year or so.
"There are few deals I've worked where rents have moved so dramatically," Martin says. "When we got the assignment, the asking rent was $1.40 per sf after two months free rent; by the time we started marketing the concession had been completely eliminated, the property was fully leased and the new net rents being achieved were $1.60 per sf."
As a result, the asset attracted top-notch institutional buyers and created a highly competitive bid process, he says. The buyers were also attracted to the location, which provides immediate access to Commons Park and the Cherry Creek bike path, which serve as a buffer between the Downtown core to the east and residential neighborhoods to the west. Amenities include a clubhouse, fitness and business centers, a resort-style heated swimming pool and multiple courtyards with outdoor fireplaces.
"The Downtown Denver rental market has recently seen tremendous growth," says Robert Curran, vice president of JP Morgan Fleming Asset Management. "With continued high occupancy rates, many properties have eliminated concessions and are raising rents. We anticipate this rent growth to continue with the economic growth of Denver."
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