Trion Properties, which specializes in multifamily investments in the West, has made its first acquisition in the Denver market after strategically evaluating opportunities since last year.
The Los Angeles-based real estate private equity firm has acquired The View at North Peak, a 288-unit multifamily community in Northglenn, a Denver suburb. The mixed-income community was purchased in an off-market transaction for $38 million, according to the firm.
“As an experienced owner and operator of apartment communities in the Western region, including the Greater Portland, Bay Area, and Los Angeles markets, we recognize Denver as a market with a powerful potential for return on investment,” says Max Sharkansky, managing partner at Trion. “Denver benefits from strong employment, an affordable cost of living relative to the very high quality of life the area offers, a pool of sophisticated top talent, and the expansion of several prominent companies.”
Amazon recently announced Denver as one of six U.S. tech hubs it’s growing in, and software company Palatir is moving its headquarters to the Mile High City and expects to continue to expand in the market. The Northglenn submarket has experienced significant growth in the past several years. In 2018 alone, it saw the completion of $350 million in commercial projects, including an Amazon distribution facility, Topgolf’s second Colorado location, and Denver Premium Outlets.
“Northglenn is well-positioned geographically to serve as an affordable suburb to a multitude of major employment hubs,” says David Moghavem, director of acquisitions. “Downtown Denver, [the area’s] top employment hub, is just 11 miles south of Northglenn via the I-25. Northglenn also serves as a feeder to the US-36 Interlocken Tech Corridor and Broomfield to the west, Boulder to the northwest, and the booming DIA submarket to the east.”
According to Moghavem, due to the COVID-19 pandemic, Trion was careful to underwrite conservative worst-case scenarios and implement a well-planned strategy to acquire the asset using favorable debt.
Capital One provided a $27.4 million Fannie Mae fixed-rate loan for the acquisition. The seven-year fixed-rate loan has four years of interest-only payments followed by amortization on a 30-year schedule.
Andrew Kwok, vice president in Capital One Multifamily Finance’s office in Newport Beach, Calif., originated the transaction.
“Capital One was able to secure outstanding terms—including an interest rate in the mid-2% range—and deliver seamlessly,” says Farhan Mahmood, Trion’s managing director of acquisitions.
Because more than 20% of the units are restricted to 50% or less of the area median income, the purchase qualified for financing under Fannie Mae’s Multifamily Affordable Housing Properties program.
“Working from home during the pandemic has only heightened our awareness of the importance of communication with our customers, with the agencies, and amongst our team at every stage of a transaction,” Kwok says. “The constant exchange of information helps us move forward as quickly and smoothly as possible.”
Trion plans to rebrand the property, which was built in 1970, to View Apartments and will implement a series of cosmetic renovations to continue the existing program of upgrades to the community.
The community features one- and two-bedroom apartments with living and dining rooms as well as access to private patios or balconies. Amenities include two swimming pools and outdoor green spaces. The community also is surrounded by nature trails and has views of the Rockies.