Building 115 new Capitol Hill apartments isn’t cutting it for a Denver real estate firm.
RedPeak recently bought a trio of apartment buildings on Ogden and Marion streets. The company paid $13.85 million for 66 total apartments, just as it begins construction on 115 new units at Seventh Avenue and Sherman Street.
“We were attracted to the overall quality of the assets, the premier location and the strong rental history,” said Bobby Hutchinson, RedPeak’s investment director. “We’ve got a central Denver portfolio of 20- to 100-unit properties within Cap Hill that these properties fit very well into.”
RedPeak’s newest holdings are at 929 Marion St., 1153 Ogden St. and 1145 Ogden St. The Denver-based firm paid $6.375 million for 23 apartments in the Ogden Street properties and $7.475 million on 43 apartments in the Marion Street building.
The total purchase price came to about $209,000 per door. Hutchinson said RedPeak paid cash for the buildings but may take out debt on the property post-sale.
The Marion Street property is a 60-year-old building with 43 studios and one-bedrooms. It was renovated a few years ago. And renters are paying an average of $1,000 a month.
The six-unit building at 1153 Ogden St. was built in 1896 and was also recently renovated. Its next-door neighbor at 1143 Ogden St. has 17 units and was built in 2012. The Ogden Street buildings are a mix of studios, one- and two-bedroom units pulling an average rent of about $1,500, Hutchinson said.
The sellers were Denver Stanley LLC and Mountain Pacific II LLC, both entities owned by a partnership between Fritz Reichardt and Silver Creek Development Group Managing Partner Brian Ketterhagen.
ARA brokers Robert Bratley, Justin Hunt, Andy Hellman and Kevin Jewett handled the deals on the seller’s behalf. Bratley said the renovations were key to pulling such high prices.
The smallest building, for example, is a former mansion and its six units have exposed brick walls. The Marion Street property’s recent upgrades included a new roof and a new heating system.
“It really appeals to more than just the young professional crowd,” Bratley said. “Because of the high finishes and quality the owners put into it, they were able to bring those units to a level where people in their 40s, 50s and 60s still want to be renting units in those locations.”
RedPeak doesn’t have any significant upgrades planned for any of the properties, Hutchinson said, aside from some minor landscaping. The entire 66-apartment portfolio is fully leased.
RedPeak currently owns about 730 units between 17 buildings in its downtown Denver “Urban Living Portfolio,” and Hutchinson said he’s still hunting down new deals in Cap Hill and the surrounding neighborhoods.
“They’re hard to come by, and there’s quite a bit of competition on the acquisition side for these assets,” he said. “There were numerous other bidders, and ultimately, we were able to get them. We see that on everything we buy these days.”