A Lakewood real estate investment firm purchased the Rustic Hills Park Apartments for $4.2 million last week.
The 243-unit complex was one of the last distressed properties on the market in Colorado Springs and sold for just $17,279 per unit or $17.37 per square foot, according to a release from Apartment Realty Advisors, which brokered the deal.
The property was under the control of a court-appointed receiver at the time of sale. ARA
Colorado Senior Vice President, Ken Greene, and Senior Associate, Kevin McKenna,
represented the receiver, California-based Trigild, in the disposition.
Connexion Asset Group, the Lakewood-based real estate investment and property management firm that purchased the property, was one of 15 bidders, McKenna said. Connexion was selected because of its history of closing on deals for distressed properties and turning them around.
With the all in costs of building a garden-style community in Colorado Springs reaching
$130,000 per unit and above, Rustic Hills Park represented a significant value-add buy when compared to replacement costs, according to the release.
The installation of a new management team and curing of deferred maintenance should push occupancy levels back to market, according to the release.
“This was a unique opportunity to purchase one of the last remaining distressed apartment communities in this economic cycle,” McKenna said in a statement. “The fact that this was a court-appointed receivership sale allowed the borrower to avoid foreclosure while the buyer was able to purchase the property at an attractive price per unit. However, the property has substantive deferred maintenance and vacancy issues that will need to be addressed. The buyer plans to reposition the property by curing the outstanding deferred maintenance items, rebranding the asset, adding amenities, and stabilizing the occupancy back to market levels.”
Constructed in 1968-1972, Rustic Hills Park Apartments is centrally located just down the street from the Citadel Mall, and the Academy Boulevard retail corridor. With an average unit size of over 900 square feet, Rustic Hills Park offers larger floor plans than the majority of its competition and has a large number of three-bedroom units, which are limited in this submarket.