Encore Wins Financing for Next Apartment Project
- Jan 13, 2012
Thornton, Colo.—Encore Multi-Family LLC has closing on the financing for the its next ground-up development project, a garden-style apartment property in the Denver suburb of Thornton. The company didn’t disclose the details of the financing.
Since June 2010, Encore Multi-Family, a subsidiary of Encore Enterprises Inc., has started construction on six new developments. The Dallas, Texas-based company says that the new development represents the beginning of its western expansion, after mainly concentrating on the Southeastern United States.
“Equity financing for ground-up development continues to be a challenge,” Brad Miller, president of Encore Multi-Family, tells MHN. “Although institutional investors have preferred urban infill, TOD projects, only 5 percent of renters can afford to live there. Encore Multi-Family prefers close-in, suburban locations which are intended to cover a broader base of renters.”
Encore Highpointe Park, which will have 220 units, counts as just such a close-in suburban location, since it’s about eight miles north of the Denver CBD. As the only residential community in the fully developed Highpointe Park PUD, it will enjoy the benefits of 1.2 million square feet of existing retail nearby, including numerous national brand stores.
“As urban infill locations continue to move toward potential overbuilding, there may be a surprising downward adjustment in rents and resulting values that may catch these investors by surprise,” Miller continues. “We like our chances at Encore Highpointe Park to capture the renter-by-choice at an attractive price point.”
Denver’s apartment market is strengthening, with a metro vacancy rate at 4.9 percent in the third quarter of 2011, according to the Apartment Association of Metro Denver, down from 5.3 percent a year earlier. Last year also saw upward pressure on rents and not many new units come on the market.