A Los Angeles-based real estate company that owns four apartment complexes in Colorado Springs has paid $25 million to buy a fifth.
LocalConstruct Inc. completed its purchase last month of the 208-unit Village at Westmeadow apartments, east of Colorado 115 and Academy Boulevard on the city's far south side.
Casey Lynch, LocalConstruct co-president, said the company likes the economic strengths of Colorado's Front Range. Although some institutional investors have overlooked Colorado Springs to focus on Denver, he said the Springs has a great quality of life, affordable housing and an improving economy that will appeal to renters.
"We very much like the market there, and we're very long-term oriented," Lynch said. "It's a market we believe in for the next 30 years."
LocalConstruct bought the property from RK Holdings, based in Long Beach, Calif., and plans to upgrade apartment fixtures, lighting and flooring, Lynch said. Land records show the complex was built in 2000.
The company's purchase is another sign investors are bullish about the Springs' apartment market, said Stuart Sloat, a commercial broker with Olive Real Estate Group, who - along with Olive's Stanton Kensinger - represented LocalConstruct. Several local apartment complexes have changed hands in the past few years as the area's vacancy rate drops and rents rise.
And as the Denver market heats up and prices rise there, some investors see an opportunity for higher yields in the Springs, he said.
"They feel good about our local apartment market," Sloat said of LocalConstruct. "It's also one of the most stable, steady investments out there."
Millennials, baby boomers and empty-nesters are driving the demand for apartments; many young people don't want to be tied to a mortgage, while some older people are looking to downsize, real estate experts have said.
LocalConstruct also owns Fillmore Ridge, Wind River Place, Palmer Park Apartments and Esperanza Village in Colorado Springs. With its latest purchase, the company owns about 800 local units.
The company is active in other areas of the western United States, including Los Angeles and Boise, Idaho.