An affiliate of Oberndorf Real Estate Management, LP., and The Bascom Group, LLC, have closed on the acquisition of the 360-unit Hearthstone at City Center located at 932 South Helena Way in Aurora for $74 million.
Hearthstone marks Bascom’s fourth acquisition of 2024 and comes shortly after the recent acquisitions of The Overlook, a 344-unit garden-style multifamily property located in Albuquerque, New Mexico and Texan26, a 204-bed student housing community in Austin, Texas. Once the largest multifamily owner in the state of Colorado, Hearthstone is Bascom’s 37th acquisition in the state and 10th acquisition in the City of Aurora.
Constructed in 1984 as a low-density community comprised of forty-one buildings across 18.25 acres, Hearthstone features ample onsite outdoor space and a diverse mix of one-, two- and three-bedroom floor plans. The community is conveniently located southeast of Aurora City Center, a midway point between downtown Denver and Denver International Airport, just minutes from the I-225 highway, the Aurora Metro Center Station RTD Line, and a 20-minute drive to downtown Denver.
The community has been well-maintained over numerous renovation programs throughout the years and offers select units with contemporary appliances, in-home washers and dryers, hardwood-style flooring, walk-in closets, fireplaces and private patios and balconies. The highly amenitized property has a resort-style pool, outdoor grilling and picnic areas, fitness center and sauna, pet park, playground, basketball court and on-site laundry.
Renters enjoy a 50% discount relative to the costs of home ownership in the immediate area. The partnership believes it is acquiring this property at an attractive basis and yield resulting from the highly volatile economic environment over the last twenty-four months.
Peter Oberndorf, managing director at Oberndorf Real Estate Management, said, “While there is some softness in rents due to elevated supply deliveries, the partnership is positive on the long-term trajectory of the Aurora submarket and greater Denver MSA as new supply becomes harder to build given the higher interest rate environment and recent development restrictions, which will stagnate supply for the foreseeable future.”
The partnership’s business plan includes an extensive value-add renovation program that includes upgraded appliances, countertops and lighting; additional in-unit washers and dryers; added kitchen backsplashes; new cabinets and fixtures; and wood plank flooring. Common area improvements are planned for the fitness center, leasing center and pool, as well as a completely redesigned multipurpose activity area, façade enhancements and revamped landscaping.
Jim Singleton, Bascom’s senior vice president & principal of acquisitions, shared, “We are thrilled to make yet another multifamily investment in the city of Aurora and the state of Colorado. Despite a challenging transaction market, we are finding select opportunities that we anticipate will be strong investments for our company and our highly valued partners such as OBREM.”
Bascom’s Senior Vice President of Portfolio Operations, Paul Zakhary, added, “Bascom plans to further elevate the Property by strategically repositioning and improving operations that will make Hearthstone a top choice among multifamily product in the immediate area.”
The partnership continues to focus on investments in the multifamily sector across the United States, with a focus on value-add opportunities that arise as pricing resets occur amid significant global macroeconomic pressures.
CBRE’s Terrance Hunt, Shane Ozment, Andy Hellman, Justin Hunt, Chris Hart, and Brad Schlafer with CBRE’s multifamily investment properties team in Denver represented the seller in the transaction. Troy Tegeler, Trevor Breaux and Ryan Greer with CBRE Debt & Structured Finance in Greater Los Angeles arranged the acquisition financing.
