3 Denver-Area Apartment Deals Hint At Improving Capital Flows

3650 S. Broadway, Englewood, Colorado

Three multifamily trades in south Denver and nearby suburbs are the local demonstration of a recent resurgence in property sales nationwide that has occurred as investors finally begin to get back in the game after two years of high interest rates.

AvalonBay Communities paid $95M for a 306-unit apartment community at 3650 S. Broadway in Englewood. Formerly called Alta Cherry Hills, the complex will be rebranded as Avalon Cherry Hills in alignment with AvalonBay’s line of high-end apartments.

The community was constructed in 2016 and last traded in 2017 for $78.3M, according to the Denver Business Journal.

The $70M sale of the 240-unit Ridge at Lowry and the $43.5M acquisition of the 114-unit Parkside at Littleton Village round out the trio of deals that feel reminiscent of the pre-2020 apartment investment market in metro Denver.

Back then, a single week with multiple apartment trades announced was a common occurrence, but deal volume slowed substantially after the pandemic and subsequent interest rate hikes. But despite the Federal Reserve’s decision last week to hold interest rates flat yet again, funds held to the side by the investors for months are beginning to shake loose.

The Denver purchase, for instance, was the second AvalonBay made in July, according to its second-quarter earnings report.

Buying Parkside was also the second acquisition made by purchaser Brixton Capital in the last 12 months, according to a press release from Walker & Dunlop, which represented Grand Peaks, the seller in that deal.

On a much larger scale, Equity Residential on Wednesday announced its acquisition of 3,600 apartment units from Blackstone for nearly $1B.

Investors, at least in the metro Denver deals, are sticking with more suburban areas rather than getting back into central business districts. Areas on the outskirts of cities continue to see more activity than downtowns, and those activity levels are attractive to multifamily investors.

The Denver Tech Center, in southeast Denver and crossing over into Greenwood Village, actually holds more office space than downtown Denver but carries an office vacancy rate of 21.2% compared to 33.9% downtown, according to CBRE research.

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