Out-of-state buyers anted up nearly $100 million last week for a pair of Colorado Springs apartment complexes as investors continue to show they’re bullish on the city’s red-hot multifamily market, economy and quality of life.
Buchanan Street Partners, a real estate investment management firm based in Newport Beach, Calif., paid $72.5 million on Dec. 7 for the 328-unit Creekside at Palmer Park Apartments, southwest of Powers and Palmer Park boulevards, El Paso County land records show. It was apparently Buchanan’s first purchase in the Springs.
On the same day, Priderock Capital Partners, a West Palm Beach, Fla., company that acquires and manages multifamily properties nationwide, paid $27 million for the 160-unit Woodland Hills Apartments, southeast of Woodmen Road and Union Boulevard. Priderock has spent more than $180 million since 2014 to acquire five Springs apartment communities, according to land records.
Neither Buchanan nor Priderock representatives were available for comment.
The firms bought the properties from Griffis/Blessing, the Colorado Springs-based real estate company that manages roughly 9,000 apartments, mostly along the Front Range, owns several complexes and occasionally develops an apartment project.
Griffis/Blessing developed Creekside in the early 2000s; it bought Woodland Hills for $15.9 million in 2014, land records show.
A large part of Griffis/Blessing’s focus is the purchase and sale of apartments. The company and its network of investors buys undervalued properties, invests millions to improve the apartments, clubhouses and pool areas and sells them within five to 10 years. The upgrades allow Griffis/Blessing to raise rents, which makes the apartments more attractive to buyers and generates a solid return for investors.
In the case of Colorado Springs, many investors are attracted by the direction of the city, said Gary Winegar, Griffis/Blessing’s president of investment services. The Springs’ unemployment rate dipped to 3.9 percent in October, its housing market has been rated as one of the country’s hottest, and U.S. News & World Report ranked the city in July as the nation’s most desirable place to live.
The multifamily market, meanwhile, has been gaining strength for the last several years — driven, in large part, by demand on the part of millennials, empty nesters and baby boomers.
Apartment rents averaged $1,156.70 in the third quarter, a few cents shy of a record, according to a report this week from the Colorado Division of Housing and the Apartment Association of Southern Colorado. The third-quarter vacancy rate remained relatively low at 5.2 percent.
“Investors are looking for a good return in a solid community,” Winegar said. “And Colorado Springs is very strong and the prospects going forward are looking good.”
Griffis/Blessing was represented by commercial brokerage CBRE in the sales.