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9/25/15
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The Cherry Creek Club, a 561-unit apartment home community in Denver’s Cherry Creek submarket, was purchased for $71 mil ($127k/unit) by TruAmerica Multifamily and its institutional capital partner, Investcorp.
Built in 1974, The Cherry Creek Club features 441 one-bedroom/one-bath and 120 two-bedroom/one-bath apartments in nine mid-rise buildings on a 14-acre site. The property includes a wealth of amenities including a private lake and lakeside pool, clubhouse, fitness center, community kitchen, play ground and volleyball courts.
TruAmerica will complete improvements to the building’s exteriors and common areas started by the previous owner, and undertake a multimillion-dollar renovation of the unit interiors. Unit upgrades will include updated kitchens, new appliance packages, hard surface flooring, countertops, refinished cabinets and new fixtures.
There are approximately 1,100 rental units currently under construction in the Cherry Creek submarket to meet the need for what is expected to be 12,000 new households formed over the next five years, with the majority of these units being built for the high-end luxury user, according to Greg Campbell, TruAmerica Senior Managing Director of Acquisitions who led the acquisition team.
“The multihousing market in Denver is a prototypical example of what is taking place in the major cities throughout the Western United States,” said Campbell. “The majority of renters simply cannot afford the new inventory of apartments being delivered to these markets. This has created a shortage of quality rental housing for working class families and young professionals and our business plan for this property is intended to ultimately provide that quality housing.”
“The Cherry Creek Club represents a niche in the submarket with one bedrooms making up 80 percent of the units. Our renovation program will cater to the preferences of the younger professional which makes up a large part of the tenant demographic at the Cherry Creek Club,” he said.
David Potarf, Dan Woodward and Matt Barnett in the Denver office of CBRE represented both the buyer and seller in the transaction. This latest acquisition represents TruAmerica’s third joint venture with Investcorp and increases the firm’s Denver portfolio to more than 2,200 units.
The acquisition was funded with 10-year, floating rate, agency debt financing that is interest-only for five years, which is expected to contribute to strong projected returns for its investors. The financing was arranged by Brian Eisendrath, Annie Rice and Brandon Smith of CBRE Capital Markets.
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