A California real estate investment company that's unabashedly upbeat about Colorado Springs has paid a record price to acquire its fourth local apartment complex, bringing its total investment in the city to nearly $290 million over the last two years.
Benedict Canyon Equities of Los Angeles last week bought the 108-unit Pines at Broadmoor Bluffs apartments, northwest of Broadmoor Bluffs Drive and Neal Ranch Road on the city's far southwest side.
The company paid $49 million to purchase the apartment complex from an investment group headed by Springs real estate company Griffis/Blessing, which bought the property in October 2015 for $20.3 million, El Paso County land records show.
Benedict Canyon's per unit purchase price of $453,704 is the highest ever in Colorado Springs, beating the previous record of $393,393 that was set in late 2020 with the sale of downtown's Blue Dot Place apartments.
"When you talk about the price, nothing demonstrates your resolve, your belief in a market more than stepping up on price," said Jim Rosten, Benedict Canyon's co-founding principal.
Colorado Springs' strong economy, quality of life and growing population are the city's obvious traits, Rosten said. But the Springs offers more, he said, including friendly people and a receptive climate for businesses and investors.
"From a business perspective, Colorado Springs, I think, was one of the best kept secrets," Rosten said. "It's not a secret anymore. ... It's a great place to do business, I feel. So we're bullish on Colorado Springs. We will continue to be bullish on Colorado Springs.
"Once you start scratching below the surface, you really get a vibe there," Rosten added. "It's a neighborhood town. It's not a big city that's become impersonal. I can contrast it with where we live here in Los Angeles."
Los Angeles also is a tough place to do business, he said.
"We have just crazy politicians here and because of that, we're not going to invest in our own backyard," Rosten said. "I'm building here, but I'm not buying existing product here. It's just too hard to do business.
"I think Colorado Springs is more receptive, especially to quality owners," he said. "That's the real story behind it all, I think. It's a better place to invest, it's a better place to live, frankly. I would live there. If I can get out of here, I might."
Rosten said he expects Benedict Canyon will purchase three to four more Colorado Springs apartment properties, which the company typically buys with the idea of upgrading them and increasing their value.
In December, Benedict Canyon paid $82.5 million for The Vue at Springs Creek, a 280-unit apartment complex on the city's south side, county land records show. In 2020, the company also paid $86.8 million for the 332-unit, northeast-side Champions Apartments and $69.3 million for the 292-unit Advenir at Springs Canyon in northwest Colorado Springs, which has been renamed Artemis at Springs Canyon.
At the Pines at Broadmoor Bluffs, built in 1987, Benedict Canyon plans to spend $2 million to $3 million on interior and exterior improvements, Rosten said.
"The property itself has a lot of upside to it," Rosten said. "With some fresh dollars put into it, I think it will even be that much better. The location is superb, obviously, near The Broadmoor (the five-star hotel on the southwest side). Anything you can get near there is superb."
Kevin McKenna, an executive vice president with the Denver office of national real estate firm CBRE, said the Pines at Broadmoor Bluffs is in a quiet residential area where few apartments have been built over the last 20 years.
The property has larger, 1,100-square-foot units that each have a garage, which also made it appealing. CBRE, which represented Griffis/Blessing in the property's sale, had almost 20 offers for the property, said McKenna, who was joined in marketing the property by CBRE's Saul Levy, Mackenzie Walker and Jessica Graham.
Benedict Canyon is one of several real estate investment or development companies that have set their sights on Colorado Springs in recent years as an attractive apartment market.
Its growing population and healthy economy have triggered a strong demand for apartment living. In turn, that's led to record-high rents — an average of nearly $1,500 a month in the first quarter, a report showed last week — and low vacancy rates, which investors and developers covet.
Griffis/Blessing, which sold the Pines at Broadmoor Bluffs, pools together investment groups to acquire apartments. The company and its investors then upgrade the properties and increases rents before they're sold, typically after seven to 10 years.
At the Pines at Broadmoor Bluffs, Griffis/Blessing replaced building roofs, windows and garage doors, painted the exterior and performed mild upgrades to about one-third of the units and the clubhouse, said Gary Winegar, the company's investment services president.
Though interest rates and borrowing costs are going up for buyers and investors, Winegar said he still expects apartment properties to sell for top dollar. Many groups have money to spend, and as long as the Springs adds jobs and wages increase, investors will be interested, he said.
"There's so much equity out there that has been raised to invest in apartments already," Winegar said. "Today ... with this uncertainty we've got going on right now, people are interested in buying hard assets, like real estate."