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7/15/21
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DB Capital Management has purchased Spring Hollow, an 88-unit apartment complex in Millcreek, UT, an affluent suburb of Salt Lake City. The property is located at 340 E. Gordon Lane, just east of State St.
Millcreek is located less than 15 minutes from Downtown Salt Lake City to the north and less than 30 minutes from the Silicon Slopes to the south, two of the most important employment hubs across the Wasatch Front. Served by the nearby UTA Trax Murray North Station, which provides access throughout the Salt Lake City Metro, Provo and Ogden, Spring Hollow is within close proximity to entertainment areas such as Commons at Sugar House and Fashion Place Mall. It is also is within 30 minutes of five of the most popular ski resorts in Utah.
DB Capital plans an extensive renovation of the entire community which has largely remained untouched since it was constructed in 1973. Improvements will exceed $40k/unit and include replacement of cedar shingle mansard roofs, new exterior paint, the addition of a brand new leasing office, a large indoor/outdoor fitness center, basketball court, dog park, and an activated courtyard area with games and seating situated around new fire pit and BBQ areas. Each of the community’s 88 two-bedroom/one-bath units will be updated as units become available with quartz countertops, stainless steel appliances, in-unit washer/dryer, new plumbing and lighting fixtures, and new cabinets.
The property was 98% occupied at the time of closing and DB Capital expects the renovation timeline to take approximately 16 months to complete.
The acquisition of Spring Hollow caps approximately $100 mil of transaction activity for DB Capital in Salt Lake City over the past 12 months. Its third acquisition during that period, the firm also exited five investments, some of which date back to when the firm entered the market in 2018.
“Salt Lake City was one of the first markets we invested in as a company and we seem to have found a great niche in these types of middle market opportunities,” said Devin Antin, Managing Partner of DB Capital. “The Salt Lake City multifamily market is one of the most, if not the most, fundamentally sound in the United States with strong population and job growth and was our best performing market throughout the pandemic.”
The multifamily market in Salt Lake City continues to thrive, as it saw a 2.4% rent increase in 2020 in spite of the emergence of the COVID-19 pandemic, compared to many other metro areas which experienced flat or negative rent growth during the same period, according to Darren Hulick, Regional Vice President in charge of overseeing DB Capital’s market presence in Salt Lake City, Denver and Portland.
“Given the property’s park-like setting nestled directly up against Big Cottonwood Creek, it will be attractive to renters looking to escape the higher density podium developments that make up a majority of the new options for renters,” said Hulick. “With Salt Lake City’s supply growth having a heavy concentration in high density projects in the urban core, coupled with rising land and construction costs, we see tremendous opportunity in acquiring low density garden-style assets at a significant discount to replacement cost and improving them to a point that their rents can draft off more costly new construction.”
Jason Wadsworth of Wadsworth Multifamily represented both buyer and seller in the transaction. Additionally, Arbor Realty Trust provided the first trust deed which was arranged by Marc Belsky of Marc Belsky Ltd.
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