29th Street Capital Buys Denver-Area Apartments for $134M
- Jun 07, 2021
Real estate investment firm 29th Street Capital (29SC) has acquired the Class A apartment community Parq at Iliff Station in Aurora, Colo. The purchase price was $134 million. The identity of the seller was not disclosed.
The acquisition reflects a change in direction for 29SC, which has focused on value-add multifamily acquisitions, and now is targeting newer, larger and higher-quality assets. The company expects to gain investment upsides by leveraging increased management efficiencies, energy savings initiatives and improving market conditions. The property will be managed by 29SC’s in-house property management group Haven Residential.
Built in 2018 at 2602 S. Anaheim St., the 424-unit community features residences with 9-foot ceilings, Moen plumbing fixtures, carpeted bedrooms, soaking tubs with tile surrounds and, in select units, private patios and balconies. Among the amenities is space that can be rented for private parties.
“Our biggest challenge to navigate during the transaction was inflated ad debt levels as a result of COVID-19,” 29SC Senior Vice President of Acquisitions and Development Rob Gersch told Multi-Housing News.
“Since the onset of the global pandemic in early 2020, property operations, like many other businesses, were negatively impacted,” he added. “What started as a formidable problem to get our arms around ended with 29SC reclassifying the circumstance as a unique opportunity to seize upon as the market began to recover.”
He added the company “took a surgical approach to understand the driving forces behind the rising bad debt levels over the last 12-plus months. With the support of Haven Residential . . . we began to collectively peel back the layers. We examined the non-paying cohort, rental collections, trailing A/R delinquencies, lease-up dynamics, retention metrics, as well as several other operational factors,” Gersch said. “As a result of our thorough analysis, 29SC was able to extrapolate numerous encouraging data points over the last three to six months of operations. This evaluation and identification of positive trends mitigated any concerns about the property’s future bad debt levels.”
Situated 11 miles southeast of downtown Denver, Parq at Iliff Station provides residents with a convenient location. Direct access to RTD Iliff Station gives residents easy access to downtown Denver, Denver International Airport, Fitzsimons Medical Campus and the Denver Tech Center. Also conveniently accessed is the Southeast Business Corridor, providing high-paying employment positions across a number of industries.
Additional favorable factors helping make the Denver area attractive include robust in-migration, favorable income tax rates and a well-educated and diverse workforce.
Parq at Iliff Station was financed with a fixed-rate Life Company loan arranged by Brian Eisendrath and Cameron Chalfant of CBRE. Earlier this month, a ranking of the most powerful brokerages found CBRE firmly in first place.