Denver—Oak Coast Properties has acquired Pembrooke on the Green Apartments in Denver for $129 million. The transaction represents the largest deal to date for Los Angeles-based Oak Coast Properties, and provides the company with a property in the coveted southeast quadrant of the rapidly-growing Mile High City.
Oak Coast Properties has earmarked $1.9 million for capital improvements to the apartment community. Those upgrades are expected to begin immediately. A $103 million loan from HFF enabled Oak Coast Properties to acquire Pembrooke on the Green Apartments.
Currently experiencing record growth, the greater Denver metro region is welcoming more than 50,000 new residents each year. For-sale new home construction continues to lag, resulting in ongoing growth in demand for rental housing. Only 14,000 new units will be built in each of 2016 and 2017, far short of demand for 17,000 new apartments yearly.
“This acquisition marks our firm’s largest to date and brings our Denver portfolio to more than 2,300 units,” Oak Coast Properties’ Co-founder and Managing Partner Phillip Nahas said.
“Having acquired and amassed a portfolio with a valuation of nearly a billion dollars and with the continued strategic alliances we have with our capital partners, we are committed to achieving above market risk-adjusted returns through our investment strategy in Denver and other strategic markets across the country.”
Located at 10700 E. Dartmouth Ave. in Denver, Pembrooke on the Green is a 42-year-old apartment community that features 959 studio, one- and two-bedroom apartments across 37 three-story structures. Units feature fireplaces, walk-in closets, cable TV hookups, garbage disposals and frost-free refrigerators. Common-area amenities include a fitness center, two heated swimming pools, sauna, barbecue and picnic area, playground, soccer field, splash park, walking path, business center, two clubhouses, kitchen, dog park and laundry rooms.
The renovation of Pembrooke on the Green is expected to include significant upgrades to landscaping, outdoor furniture, parking lot, leasing office, pool, clubhouses and laundry room. Stairways, roofs and gutters will all be fully repaired.
Pembrooke on the Green is conveniently located to downtown Denver, Denver Tech Center, Fitzsimons Life Science District and Denver International Airport.
Denver’s growing population is putting substantial stress on the metro’s housing market, resulting in new unit deliveries failing to keep pace, Nahas added. “Positive employment growth combined with these forceful market dynamics provides a ripe opportunity to drive returns through the upgrade of existing apartment assets such as Pembrooke on the Green.”
With more than 1 million square feet of office space being built in the southeast Denver metro, demand for apartments in that quadrant is expected to be ratcheted even higher.
“This asset continues OCP’s tradition of identifying, acquiring and adding value to superior assets acquired with conservative underwriting and superior management and producing above market risk-adjusted returns for our investors,” Nahas said.