The Metro is located on 5.6 acres at 2121 Delgany St. in Denver's Lower Downtown district, near Coors Field. It was 89% occupied at the time of sale. A wood-frame development with structured parking, the buildings have flat roofs, brick, stone front stairs, and exposed steel and warehouse windows. Amenities include a club room, a business center and a fitness center. The project won the ULI's Pillars of the Industry award in 2004.
"The best way to portray this is by saying it was a 'per-pound buy'; cap rate was not a driving factor," says one local source. "It was acquired for approximately $132,000 per door and would cost easily $200,000 per door to build today."
The benefit for Rreef is that the asset could sell for more than was owed on it, according to the source, which means that Rreef could pull a little cash out of the deal. Despite the discount to replacement cost, the sale marks the largest multifamily transaction in Denver in 2009.
Denver has been a pretty thinly traded market and local industry experts expect that to continue. That having been said, there are two other recent apartment transactions to talk about, one that recently closed and one expected to close sometime in the first quarter.
Moran & Co. also recently brokered the sale of Summitt Ridge, a 360-unit class B property next to the Denver Tech Center. The sale price was $22.7 million, or a little more than $63,000 per unit. The buyer was Trilogy Real Estate Group, a Chicago-based company making its first multifamily acquisition.
"They put a 10-year loan on it that has an attractive interest rate relative to the cap rate," one local source tells GlobeSt.com. "They have good positive leverage from day one."
The other deal is 4550 Cherry Creek, a 24-story, 288-unit apartment tower located between Downtown and the Denver Tech Center that Behringer Harvard has put under contract for $53 million. The Addison, TX-based investment firm earnest money deposit is expected to go hard in January.
The seller is New York City-based Sentinel Real Estate Corp., which acquired the property from Hanover Co. in 2005 for $75 million, according to the brokerage firm that had the 2005 disposition assignment. The initial plan was to covert the building to condominiums, according to the brokerage firm, but it never happened. Property amenities include a resort-style heated pool and spa, a fitness center, and a business center and conference room.
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