Oak Coast Properties and BMC Investments have acquired 1,023 multifamily units in Denver in a deal valued at $177 million.
Known previously and separately as Timberline Apartments, Woodhaven Apartments, and Westwood Apartments, the properties provide critical workforce housing in the region and will be renovated and rebranded as one large community named Ivy Crossing.
“This acquisition represents a true one-of-a-kind opportunity within metro Denver to reposition three individual legacy assets and to create critical mass by combining them into one of the largest in a region where housing is in high demand,” said Phillip Nahas, managing partner of Oak Coast. “Not only is the upside potential of this value-add portfolio substantial, but these apartments will provide improved housing options for Denver’s workforce.”
The deal marks the Southern California–based company’s largest acquisition to date.Originally built between 1974 and 1977, the properties had been owned and operated by the original developer, according to Nahas.
The units within the portfolio have been well maintained, providing quality assets for acquisition. Return on investment will be driven through a capital improvement program, valued over $5 million, which will focus on exterior and amenity components that have not been upgraded in over 40 years, according to the new ownership.
Specific efforts will include improvements and centralization of the combined community leasing center, full renovations to a formerly shuttered 5,000-square-foot clubhouse and amenity center, enhancements to landscaping and property exteriors, and the handling of some deferred maintenance issues.
The acquisition marks the ninth and largest investment partnership between Oak Coast and BMC, as well as the 11th Oak Coast assignment for BLDG Management, the property management affiliate of BMC.
HFF arranged 15-year, full-term interest-only $120 million financing for the acquisition through Freddie Mac’s Optigo Social Impact initiative, which helps preserve affordable housing. In return for lower-cost loans, borrowers must reduce or maintain a majority of a property’s unit rental rates at levels affordable to households earning 80% or less of the area median income for the life of the loan.
“With the debt that we’re doing, we’ve created an affordable program with the social impact loan, which puts an affordable restriction on a percentage of the property,” Nahas says, explaining that about 521 units will be income restricted.
The Ivy Crossing assets are located in the prestigious Cherry Creek School District and less than 10 minutes from the Denver Tech Center Business Corridor, the largest employment center in the state and home to approximately 150,000 jobs.
With the Ivy Crossing portfolio, Oak Coast’s Denver apartment portfolio exceeds 5,000 units with over $1 billion in valuation.
Terrance Hunt and Shane Ozment of Newmark Knight Frank represented the buyers in the transaction.The HFF team that arranged the Freddie Mac loan on behalf of Oak Coast and BMC was led by senior managing director Charles Halladay and directors Brock Yaffe and Rick Salinas
