Record high rents are helping to drive record sale prices for Colorado Springs-area apartments.
New York City-based Rivendell Global Real Estate paid $44.5 million this month for the 194-unit Commons at Briargate – a record price of $229,000 per unit for a Springs-area apartment property, according to the Denver office of ARA Newmark.
The national brokerage represented the seller, a partnership that included California-based residential developer Lyon Living and Barings Real Estate Advisers, part of a North Carolina financial services firm.
It’s the second time the Commons at Briargate has sold in two years; the Lyon Living and Barings Real Estate group bought it for $33.3 million in April 2015, El Paso County land records show.
At that time, the sale yielded a record per-unit price, although subsequent purchases eclipsed that record, said Kevin McKenna, ARA Newmark’s executive managing director in Denver.
The Commons’ sale this month and its record-setting price illustrate the strength of the Springs market, said McKenna, who marketed the property along with ARA Newmark director Saul Levy.
Average Springs-area rents soared to a little more than $1,140 a month in the second quarter of 2017 – the ninth consecutive quarterly record, according to the Colorado Division of Housing and Apartment Association of Southern Colorado.
“That’s something that’s obviously very attractive to buyers,” McKenna said.
Also, apartments are full, thanks to a strong demand by millennials and empty nesters, real estate experts have said; the area’s vacancy rate has been in the mid- to low-single digits for several quarters, the Housing Division report shows. Several apartment projects are under construction, but they’re not keeping up with demand.
“Competitive interest in the property led to 15 offers,” McKenna said. “Most top bidders were new to the market, drawn to strong market fundamentals, increased employment growth, limited product and nationally ranked rent growth.”
The Commons’ amenities also helped spur interest, he said.
Each unit has its own direct-access garage; no other multifamily property has that feature, he said. Also, 80 percent of the units have been renovated and apartment finishes are comparable to newly built projects, McKenna said.
Built in 1996, the Commons’ floor plans average more than 1,000 square feet and feature 9-foot ceilings and full-sized washers and dryers.
The property’s north side location – southwest of Research Parkway and Lexington Drive – also was a plus, McKenna said. It’s a short drive to the Briargate Business Campus, the Saint Francis Medical Center and Memorial Hospital North, and shopping centers such as the Promenade Shops at Briargate.