Granite Capital Sells Denver-Area Asset

The seller acquired the property in 2018.

Granite Capital Group has completed the $46 million sale of Enclave Belle Creek in Commerce City, Colo. The property comprised 167 apartments and townhouses. GCG was represented by Transwestern Real Estate Services Vice President John Blackshire and Senior Vice President Tom Wanberg.

Situated at 9444 E. 108th Avenue, the 10-building community was completed in 2018 and acquired by GCG that same year. It features one- and two-bedroom residences ranging in size from 735 to 1,276 square feet. Units feature skylights and private balconies or patios. Planned social activities are among the amenities featured at Enclave Belle Creek.

The transaction was a 1031 exchange, allowing the investor to defer taxes on sale proceeds and reinvest into a higher-quality asset location for potentially higher returns.

“We looked at selling the property earlier, and we pulled it back because of the lack of clarity as to whether the government would change the 1031 rules,” Bruce Savett, founder & principal at GCG, told Multi-Housing News. “That was more than a year ago.” Savett declined to disclose the identity of the buyer.”

“When we went back on the market after the new year, we had it under contract for a higher price that ended up terminating, because the buyer lost their equity due to higher interest rates,” said Savett. “We later were willing to accept a lower price because it was offset by a significant yield maintenance prepayment penalty. We did all this because we felt pricing in the market was going to decline significantly. And even though we were selling at a lower price, we would be able to exchange our funds and buy at a lower price. Our overall goal was to swap from workforce housing to purchasing Class A housing, which we hope to do at higher cap rate and lower price than what we sold for.”

Savett added Blackshire and Wanberg “did a great job finding a buyer in an exchange who had very few days to find a property before being forced to pay taxes on its sale.” Several months ago, Transwestern Development Co. broke ground on a new multifamily  development in Tempe, Ariz., proximate to Arizona State University.

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