Affordable Apartment Community Trades in Heavily Amenitized Boulder
Boulder, CO — ARA, A Newmark Company (ARA Newmark) announces the $13.6 million sale of Depot Square, a new Class-A+, 71-unit, transit- and employment-centric, LEED Gold-certified community in Boulder, CO adjacent to the new Google campus. The Boulder submarket, the strongest in Colorado and one of the best in the nation, has the highest four-quarter average price per unit — at more than $373,000 and $442 per square foot— in the state. Depot Square is permanently affordable at 60 percent of the area median income (AMI) and traded at just under $200,000 per unit.
A nationwide design and development competition, initiated by the City of Boulder and the Regional Transportation District, resulted in the selection of Pedersen Development Company and its design partner, Denver-based Short Elliott Hendrickson Inc., to complete the project.
Vice Chairmen Terrance Hunt, Shane Ozment, Jeff Hawks, Doug Andrews, Executive Managing Director Justin Hunt and Senior Managing Director Andy Hellman represented Boulder-based developer, Pedersen Development Co., in the sale to boutique real estate investment firm, Avanath Capital, based in Southern California.
“This property’s phenomenal location and high-quality build made it an attractive addition to our national portfolio,” confirms John Williams, president and chief investment officer of Avanath. “As a newly-constructed affordable community within a mixed-use, transit-oriented development, Depot Square presented a compelling investment opportunity to capitalize on the demand for housing near major jobs, transit options, and retail amenities, while also maintaining affordability in one of the most cost-burdened markets in the state.”
According to Williams, market-rate rents for comparable Class-A multifamily product in Boulder average $2,100 per month, nearly double the average rent of $1,200 per month at Depot Square, indicating a critical need for affordable housing in this submarket.
“Boulder’s explosive job growth, population gains, and strong market fundamentals have fueled year-over-year rental increases, resulting in tremendous demand for affordable housing to support this growing workforce,” continues Williams.
In addition to its reputation as an emerging tech hub, Boulder boasts one of the nation’s most educated workforce and was named the “Most Educated City in America” by Forbes Magazine. The city’s flagship is the University of Colorado, Boulder, a top-tier research institution which employs over 2,100 faculty members.
“Depot Square helps satisfy the need for affordable apartment communities in one of the most expensive housing markets in the state,” Ozment said. “The property is part of a 160-acre development that includes Depot Square, a Hyatt hotel, the RTD Transit Center as well as a 382-space parking garage. The asset is phenomenally located – surrounded by employment opportunities, near the Twenty Ninth Street Mall and Whole Foods.”
Located at 3195 Pearl Parkway, Depot Square is 200 yards from Google and directly above the Boulder Transit Center. At 330,000-square-feet, the Google campus will hold up to 1,500 employees and phase one of the two-phase development, includes two buildings that will be completed this year. The transit center, which opened August of 2015, provides property residents with complimentary access to the entire RTD transit system, including the new Flatiron Flyer service to Denver, Westminster, Broomfield, Louisville, Superior and Boulder.
Avanath plans to lease-up the remaining vacancies, implement light capital improvements, and improve operational efficiencies to drive value and increase net operating income for the asset.
“Overall, this acquisition aligns with our strategy of targeting supply-constrained markets with long-term growth fundamentals,” affirms Williams. “Our investment thesis is to acquire affordable assets with value-add potential, enabling us to generate competitive returns while also enriching entire communities in need of affordable housing. Depot Square’s LEED Gold Certified designation also reflects our deep commitment to sustainability and impact investing.”
Based on the market’s long-term growth and superior quality of life, Avanath plans to actively target the Denver and Boulder MSAs for future investments, according to Williams.
Avanath purchased the property from a local developer for $13.6 million. Shane Ozment of ARA Newmark represented both the buyer and the seller in this transaction.
Depot Square is located at 3195 Pearl Parkway in Boulder, Colorado.