Real Estate Finance & Investment
June 1, 2015
The RADCO Companies has completed a major redevelopment of the Ashford Belmar, a 512-unit apartment and townhome complex in Denver, Colorado’s Lakewood submarket. The company spent almost $2m on the renovations. “None of the other properties in the area have these kind of amenities in such a great setting,” Norman Radow, president and CEO, said. “The most exciting thing for me is that we’re setting the bar with this property.”
RADCO originally acquired Ashford Belmar in June of 2014 for $95.33m in the largest multifamily acquisition by purchase price in Denver at the time. The company was drawn to the property because it fit well within RADCO’s business plan. “RADCO targets three things when we buy a property: that it is underperforming in the market, that it presents a value-add opportunity and that it has the potential for a great story,” Radow said. “We had that with this property, and it made for a really special deal.”
RADCO saw an attractive opportunity within the submarket that included upside potential for the property’s rents and envisioned a renovation to better position it for the market today. “Location is so important for every asset, and this property is in a unique location that is only getting better,” Radow said.
“The building was gorgeous when we bought it, and we knew that with just the right amount of spit and polish, we could easily compete with brand new properties nearby. Because the units are so large and range from about 800 square feet to more than 1300 square feet, it competes favorably with the new product that is being produced in the area. Most new units in this location are about $1,000 more for about 300-400 square feet less, so there is a huge runway with our rents going forward.”
The renovation was funded using private capital and included the re-positioning of the property’s 27,500 square foot clubhouse and leasing center. Additionally, 20 units per week are undergoing additional renovations throughout the summer, according to Radow. The building is 88% occupied, and Radow expects it to be fully occupied by mid-June. “It took us four or five months of thoughtfulness with ideas bouncing back and forth to get this renovation project underway,” Radow explained. “We were trying to fit in a large-scale renovation plan that was still within our budget, so it took a long time and a lot of planning. It was another four or five months of actual construction work, so the whole thing came together in about 10 months total.”
RADCO is bullish on Denver as a whole and plans to continue seeking value add opportunities like this in the future, Radow added. “Denver is one of the hottest markets in the country right now,” he stated. “We love Denver so much that we opened an office there last June and have been expanding our presence there ever since.”