Oak Coast Properties has acquired two rental properties in Denver for $61 million, The Avalon and Estrella, encompassing a total of 427 units. The real estate investment firm is planning $3.2 million in renovations as part of an enhancement plan aimed at improving the marketability and ROI of the communities. With this latest acquisition, Oak Coast Properties’ multifamily portfolio in Colorado now exceeds 4,287 units under management, with over $1 billion in valuation.
“We toured and pursued this deal before the pandemic and we continued to monitor the deal for over a year,” says Phil Nahas, managing partner of Oak Coast Properties. “We were able to get it under contract at an attractive cap rate compared to the lower cap rates that similar properties are currently trading at today.”
Located at 645 Wolff Street, The Avalon is a 14-building community situated on 16.22 acres. The garden style community includes 235 rentals presented in a mix of studio and one-, two- and three-bedroom units. A robust shared amenity package features a pool, soccer field, volleyball court, fitness center, laundry facility, clubhouse and picnic and grill areas. Residents of the community enjoy close proximity to job centers, a trail system, nearby Sloan’s Lake and easy access to highways and light rail.
Originally built in 1961, recent capital improvements to the community completed by the previous owner include new electrical, roof retrofits, new parking lot, new clubhouse and new sewer lines. All of The Avalon’s 235 units will benefit from Oak Coast Properties’ planned upgrades with approximately 17% upside in rents anticipated at completion.
Located at 7030 Pecos Street, Estrella is a five-building community set on 4.47 acres. The community includes 192 units including one- and two-bedroom options. Estrella’s community amenities include a pool, soccer court, fitness center, laundry facility, grill area, playground and clubhouse. Located inside Denver’s Tech Corridor, Estrella offers residents access to major employment opportunities as well as to Highway 36 and light rail.
Built in 1971, recent improvements to Estrella completed by the former owner include new roofs, new parking lot, new fitness center and new sewer lines. 80% of the units within Estrella are currently in need of enhancement and, like those at The Avalon, will offer approximately 17% in rent increases when finished.
As part of its value-add investment strategy, Oak Coast Properties will also complete improvements to each community’s suite of amenities as well as oversee any outstanding deferred maintenance needs at each property.
“Denver continues to draw new residents with its vast employment opportunities and attractive lifestyle,” adds Nahas. “There is an ongoing housing shortage here however and enhancing existing rental stock like these two communities is one important solution to that.”
JLL Capital Markets worked on behalf of Oak Coast Properties to secure a $47 million seven-year, floating-rate loan through agency financing. The loan will be serviced by JLL Real Estate Capital. Financing was led by senior managing director Charles Halladay, director Rick Salinas and director Rob Bova.
Tom Wanberg and John Blackshire with Transwestern represented Mountain View Capital in the disposition to Oak Coast Properties.
