By Jeffrey Steele, Contributing Writer
Denver — Mill Creek Residential has grabbed a high-profile development site in Denver’s Observatory Park neighborhood. ARA Newmark represented the Dallas-based investor in the purchase. The sales price was not disclosed.
The surface parking and five single-family homes on the 1.03-acre site will be replaced with a 275-unit luxury apartment community called Modera Observatory Park.
“Mill Creek’s offer was most compelling due to their excellent track record of closing on similar development sites in the metro Denver area,” Chris Cowan, executive managing director at Denver-based ARA Newmark, told MHN. “The site on its own — due to size and zoning — would accommodate approximately 100 units and be viewed as too small for institutional investors. Mill Creek was able to double the development size by acquiring the site across the street, which was not an ARA Listing. That made the development more attractive to Mill Creek’s equity partners and also capitalized on efficiencies of scale.”
Mill Creek is planning to break ground this month on the development, which will feature two five-story apartment buildings. The project is slated to reach full completion early in 2017.
The site at 1911 S. Josephine Street in Denver is ideally situated between Cherry Hills Village and Cherry Creek, two of the most prestigious districts in the Denver metropolitan area. The development fronts both sides of Josephine Street, allowing Mill Creek to create a strong streetscape. This setting will soon be further energized by Denver University’s active college neighborhood.
“This transaction illustrates the continued demand for housing in a neighborhood experiencing some of the best market fundamentals in Denver with limited new supply, single-digit vacancies and explosive rental growth,” Cowan added. “With visibility from I-25, light rail access within walking distance and proximity to some of the highest-value homes in Denver, this opportunity was one that Mill Creek understood immediately.”
Rents at top-of-the-line Class A and Class A+ properties in Denver broke $1,600 a month in the most recent 2015 rent survey conducted by Yardi Matrix. That figure represents an approximate 10 percent increase vis-à-vis the year-earlier survey period, when rents stood at $1,458 a month.
“We were attracted to the Observatory Park neighborhood for many reasons, including the easy commute to both of Denver’s employment centers and convenient access to some of Denver’s best amenities and transit,” said Brian Wynne, managing directory at Mill Creek. “We plan to develop a high-quality community with top-level finishes, a luxury pool deck and more.”