A bank based in a tiny town on the state's eastern plains has made a big investment in Colorado Springs' red-hot apartment market and its booming downtown.
Eastern Colorado Bank of Cheyenne Wells paid $12.8 million Tuesday to purchase Casa Mundi, a four-story, 27-unit apartment building at 418 S. Tejon St. — part of a wave of new downtown multifamily projects in recent years and located along the bustling South Tejon restaurant and entertainment corridor.
The deal includes just over 5,400 square feet of commercial space that makes up Casa Mundi's ground floor.
The bank bought Casa Mundi from a local group composed of project developer Darsey Nicklasson of Colorado Springs, commercial brokers Sam Cameron and Kevin Butcher and a fourth unidentified party. Places Management, a limited liability company operated by Nicklasson, will continue to manage Casa Mundi.
The deal, announced by bank president and CEO Greg Weed and Nicklasson, finalizes a long-standing relationship between Eastern Colorado Bank and Casa Mundi. The bank had provided a construction loan and permanent financing for the project, which opened in March 2020.
Eastern Colorado Bank operates a Colorado Springs branch at 444 E. Pikes Peak Ave. on downtown's east edge, which is one of its six locations in Colorado. The bank also owns and rents a tri-plex, duplex and two single-family homes near downtown, Weed said.
Casa Mundi's purchase fits with the bank's goal of investing in properties in the communities that it serves, he said.
"Investing in properties like this that promote housing, it's just been something we've decided to do as a bank," Weed said. "Housing is important to us, so we're involved in it on every level, from construction loans, to first-time homebuyer loans ... to permanent loans and homeownership.
"Investing in the communities that we have a vested interest in, it just makes sense," he added.
Casa Mundi's location also was appealing, he said. A 261-room, dual-branded Marriott hotel expects to open in 2022 just north of Casa Mundi on the 400 block of South Tejon, while the remodeled Trolley building on the 500 block houses several restaurants and bars. The new Weidner Field multipurpose outdoor stadium is two blocks west.
Casa Mundi also sits in the heart of what downtown boosters call the New South End; the multiblock area southeast of Vermijo and Cascade avenues is home to a growing number of restaurants, nightclubs and other uses, where area residents can walk or bike as part of a so-called urban lifestyle.
"It makes it a very prime location and I think that's what was so attractive to Darsey's group in their original construction of the property, was the development in that area," Weed said.
Nicklasson said Casa Mundi wasn't for sale and her ownership group had planned to hold onto the project for a few years before selling it.
But Eastern Colorado Bank approached Casa Mundi's owners about a sale, Nicklasson said. She and her partners were receptive because of their familiarity with the bank, which Nicklasson said has a love for the city and its downtown.
Eastern Colorado "has the same vision, shares the vision for downtown Colorado Springs and shares a business principle philosophy to take care of your residents and do good by your community," Nicklasson said. "It was a good fit."
Casa Mundi is 100% occupied, Nicklasson and Weed said, though the property's website shows two apartments will be available in early October. Those listings show a one-bedroom, one-bath, 600-square-foot unit will rent for $1,915 a month, while a two-bedroom, two-bath, 1,124-square-foot apartment will go for $2,615 a month
"That speaks to the economy in Colorado Springs and how much we've bounced back," Nicklasson said of Casa Mundi's strong occupancy. Some Casa Mundi renters, she added, are newcomers to Colorado Springs who've come for jobs.
Nicklasson said talks are underway with potential users for the nearly 5,400 square feet of ground-floor commercial space. The space can be leased as one unit or split up with as many as three storefronts, she said.
Casa Mundi's owners have wanted the right users, Nicklasson said. For example, a bar, with patrons spilling out onto the street at 2 in the morning, wouldn't be an appropriate use, she said.
Instead, she'd prefer a cafe, bakery, coffee shop, pet store or men's or women's clothing boutique — uses that would benefit Casa Mundi renters and other residents on downtown's south side.
When it opened, Casa Mundi joined several downtown apartment projects that have either opened, are under construction or on the drawing board.
Nicklasson and Kathy Loo, a Springs businesswoman and philanthropist, developed the 33-unit Blue Dot Place on South Nevada Avenue, which opened in 2016 and which they sold in November for $13 million.
Other downtown apartment projects now open include the 177-unit Mae on Cascade and 171-unit 333 ECO, developed by Springs' real estate companies Nor'wood Development Group and Griffis/Blessing.
Greystar Real Estate Partners of South Carolina has launched construction of the 321-unit Fiona apartments and is preparing to start on the 277-unit Ensley apartments.
Two more projects are under construction — Nor'wood's 154-unit 322 Vermijo apartments and the 217-unit Pikes Peak Plaza apartments, being built by Denver developer Taylor Turano in partnership with longtime Springs developer Jeff Dunn and son Ryan Dunn of Denver.
Weidner Apartment Homes of suburban Seattle also plans upward of 1,200 units near downtown's multiuse stadium that it helped fund and develop.
Nicklasson, meanwhile, has also launched two apartment projects on the city's southeast side; the 223-unit Mosaica is under construction and targeted to open in 2022, while site work has started on the 150-unit Kaleidos, which possibly could be available to renters next year.