Oak Coast Properties and BMC Investments have acquired Ivy Crossing, a 1,023-unit multifamily portfolio in a high-demand area of Denver, for $177 million.
An HFF team led by Senior Managing Director Charles Halladay and Directors Brock Yaffe and Rick Salinas arranged a 15-year, full-term I/O $120 million financing for the acquisition through Freddie Mac’s Optigo Social Impact initiative.
The seller was represented in the transaction by Terrance Hunt and Shane Ozment, both vice chairmen of Newmark Knight Frank in Denver.
“Given it was a portfolio acquisition, it was a bit more challenging with several different escrows, loans and operational hurdles of taking over several assets, as opposed to just dealing with one,” Philip Nahas, principal of Oak Coast Properties, told Multi-Housing News. “We were able to overcome it by making sure we were prepared well in advance for closing, and also making sure we had properly put in a plan for the most efficient takeover of the various assets.”
The joint venture will invest more than $5 million in renovations and will rebrand the three properties as one larger community called Ivy Crossing.
The properties—formerly known as Timberline Apartments, Woodhaven Apartments and Westwood Apartments—are located in the highly-regarded Cherry Creek School District.
Constructed between 1974 and 1977, the properties have been well maintained and provide the region with crucial workforce housing. The capital improvement program will focus on exterior and amenity components that have not benefitted from upgrades in four decades. Those enhancements will include Improvements and centralization of the combined community leasing center, comprehensive renovation of a formerly closed, 5,000-square-foot clubhouse and amenity center, improvements to landscaping and property exteriors and attention to maintenance issues that have been deferred.
Located less than 10 minutes from the 150,000 jobs in the Denver Tech Center (DTC) Business Corridor, Ivy Crossing’s location gives residents quick access to such major employers as DISH Network, Level 3 Communications, Toyota, Time Warner Cable and XO Communications.
Also nearby are the Yale Light Rail Station and a number of significant retail centers. Ivy Crossing is adjacent to the 71-mile-long High Line Canal Trail, which offers hiking, biking, jogging and horseback riding to outdoors enthusiasts.
“This acquisition represents a true one-of-a-kind opportunity within metro Denver to reposition three individual legacy assets and to create critical mass by combining them into one of the largest in a region where housing is in high demand,” Nahas said in a prepared statement. “Not only is the upside potential of this value-add portfolio substantial, but these apartments will provide improved housing options for Denver’s workforce.”
Workforce housing remains one of the best asset classes to invest in, particularly due to demographics—Millennials and Baby Boomers who are renting—and a lack of supply of quality rental housing that’s affordable for working families and individuals. Earlier this year, Middleburg launched a $75 million workforce housing fund as part of the company’s strategy to purchase and rehabilitate physically and/or operationally distressed workforce housing in the Southeast and Mid-Atlantic regions, suffering from issues such as deferred maintenance, high vacancy and poor management.
Image courtesy of Oak Coast Properties