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Investors are turning to value-add and affordable housing deals in the Denver market. In the last several years, Denver has seen a large amount of luxury housing development, creating a pent up demand for more affordable options. San Diego-based investor Pathfinder Partners is targeting Denver's affordable housing market, and has recently acquired the Station, a 97-unit multifamily property in the Denver suburb Littleton for $20.7 million.
"The vast majority of new multifamily construction in the Denver metro area over the last five to six years has been class-A space, with class a rents. While some tenants can afford those rents, the majority cannot," Lorne Polger, senior managing director of Pathfinder Partners, tells GlobeSt.com. "As a result, we believe in a long term strategy of providing high quality, affordable housing for the majority of the rental market."
To target these opportunities, Pathfinder has launched Pathfinder Partners Opportunity Fund VII, which is scheduled to close this year. "We are long-term holders in the Denver metro market and have plans to continue to invest here in the future," adds Polger about the firm's strategy.
Pathfinder isn't the only investor that has identified opportunities in Denver's affordable market. The niche has become extremely competitive, along with other asset classes. "It is very competitive today, across all asset classes. That said, our competitive edge is our 13-year track record of successfully closing deals, thereby keeping both sellers and brokers happy," Polger. "We've been an active buyer in the Denver metro area since 2009 and believe we have created a very positive reputation in the investment community. In a highly competitive environment, that background helps, along with being very aggressive with deposits, due diligence and closing periods."
Overall, Pathfinder is bullish on the Denver market for both luxury class-A space as well as affordable and value-add deals. "We're very bullish on those segments next year and beyond," he says. "We don't see softening in the new class-A space impacting our workforce housing projects."
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Kelsi Maree Borland
