Colorado Springs Apartments in Burgeoning Airport Submarket Sell for $21M

DENVERCBRE announced today that it facilitated the $21 million sale of the Western Hills apartment community located at 810 Western Drive in Colorado Springs. The buyer, Griffis/Blessing of Colorado Springs, was reportedly attracted to the value-add potential of the property as well as its location in the airport submarket of Colorado Springs, an area experiencing significant development and job growth.

Dan Woodward, David Potarf, Matt Barnett and Jake Young with CBRE Capital Markets, Colorado Multifamily Investment Properties, represented the seller, Evergreen Real Estate of Chicago. Brady O’Donnell with CBRE Capital Markets, Debt & Structured Finance, arranged the FMAC financing.

“Value-add multifamily properties remain attractive to investors, but even beyond the potential to grow top line revenue through continued renovation, Western Hills was a unique opportunity. The property is superbly positioned to take advantage of the major growth happening in southern Colorado Springs, including abundant new employment options,” said Mr. Young, vice president, CBRE Capital Markets, Colorado Multifamily Investment Properties.

Western Hills sits on more than seven acres just northeast of the intersection of Platte Avenue (Highway 24) and Powers Boulevard, part of the Cimarron Hills neighborhood in southern
Colorado Springs. The site is minutes away from the Colorado Springs Airport in an area seeing more than $100 million in new development. This includes Fed Ex’s new $20-million facility at the airport as well as a newly announced $90-million Sierra Nevada campus that is slated to employ more than 2,000 people. Also nearby, Raytheon recently announced adding 700 employees in hand with a new $700 million contract. In terms of amenities, the newly built First & Main Town Center, an approximately 1 million-square- foot lifestyle center, is 5-10 minutes from Western Hills.

“Western Hills has been a well performing asset for us since acquiring back in 2015. We entered the market with a long-term approach knowing we had stable cash flow and revenue enhancement ability. However, as the market continued to rapidly improve over the past year we were able to implement a successful renovation program and create that value much quicker than anticipated. Along with our development arm we continue to seek quality, value-add opportunities to grow and maintain a strong presence in the market,” said Steve Rappin, president of Evergreen Real Estate Group.

The property is a 152-unit garden-style apartment community that was built in 1985. Approximately eighty percent of the units are two bedrooms, giving the community a large average unit size of 849 square feet.

“This community is perfectly positioned for our proven value-add strategies. Our plan is to upgrade unit interiors, including the installation of air conditioners, currently lacking at the
community. We also intend to renovate the clubhouse and fitness center, the pool area and other community amenities, creating a positive impression not only for potential renters visiting the property, but for current residents too,” said Gary Winegar, president of Investment Services of Griffis/Blessing. “The multifamily market in Colorado Springs has experienced strong rent growth over the past several years, and we believe Colorado Springs is poised for that rent growth to continue. Western Hills should be a solid investment with strong job growth nearby.”

Western Hills is Griffis/Blessing’ second Colorado Springs multifamily acquisition of 2017. “Colorado Springs continues to garner new investor interest with rents that remain affordable
compared to the Denver market yet are slated for strong growth. Furthermore, while the north and west areas remain strong, central and south Colorado Springs is picking up momentum as the lack of new apartment supply combined with job creation and a revitalized downtown drive demand,” added Mr. Young.

Western Hills was more than 96-percent occupied at the time of sale.

Image courtesy of CBRE

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