Two older apartment complexes in Colorado Springs recently sold for a combined price of $16.7 million, more proof of the area's red-hot multi-family housing market.
LocalConstruct, a California-based real estate investment company, paid $10.5 million last month to purchase the 200-unit Palmer Park Apartments, at Hancock Avenue and San Miguel Street in the central part of town.
The 20-building complex was constructed in 1949, and has a different feel than newer multi-family projects; it's in the middle of an older neighborhood and large grassy areas separate several of the buildings.
The new owners plan to upgrade the units, such as making kitchen improvements that could include new appliances, countertops, flooring and light fixtures, said Ken Greene, a broker with the Denver office of Atlanta-based Apartment Realty Advisors. Greene and ARA Colorado's Kevin McKenna represented the seller of the complex, a local private real estate investor.
Another California firm, Western Investment Partners, recently paid $6.2 million for the 112-unit South Circle Arms, northeast of Circle Drive and Fountain Boulevard on the Springs' south side. Greene and McKenna also represented that seller, a New York investor.
South Circle Arms, built in 1969, includes a fitness center, heated outdoor pool and playground, among other amenities. Several improvements were made on the property over the past few years, Greene said.
Investors are targeting Colorado Springs' rental market for a variety of reasons, Greene said.
The local economy isn't booming, but it's doing better, he said. Likewise, while jobs aren't necessarily being added at a furious pace, the area's unemployment has improved.
What's more, while several apartment projects are under construction or have been recently completed, the market isn't being overbuilt or flooded with new units, Greene said.
Those factors combined to drive down Springs-area vacancy rates in the first quarter of this year to a nearly 12-year low and push up the latest average rent to an almost record high - incentives that attract the attention of buyers who are looking for solid investments and returns, Greene said.
Both LocalMarket and Western Investment Partners own multiple complexes in the Springs, Greene said. Once buyers make a purchase in a particular market, they often look to add to their portfolio because it's more cost efficient to have, say, one manager overseeing several hundred units at multiple complexes, he said.
Contact Rich Laden: 636-0228 Twitter @richladen
Facebook Rich Laden